Correlation Between BANK CENTRAL and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both BANK CENTRAL and FLOW TRADERS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BANK CENTRAL and FLOW TRADERS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK CENTRAL ASIA and FLOW TRADERS LTD, you can compare the effects of market volatilities on BANK CENTRAL and FLOW TRADERS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BANK CENTRAL with a short position of FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK CENTRAL and FLOW TRADERS.
Diversification Opportunities for BANK CENTRAL and FLOW TRADERS
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BANK and FLOW is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding BANK CENTRAL ASIA and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD and BANK CENTRAL is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BANK CENTRAL ASIA are associated (or correlated) with FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of BANK CENTRAL i.e., BANK CENTRAL and FLOW TRADERS go up and down completely randomly.
Pair Corralation between BANK CENTRAL and FLOW TRADERS
Assuming the 90 days trading horizon BANK CENTRAL ASIA is expected to under-perform the FLOW TRADERS. In addition to that, BANK CENTRAL is 1.62 times more volatile than FLOW TRADERS LTD. It trades about -0.22 of its total potential returns per unit of risk. FLOW TRADERS LTD is currently generating about -0.02 per unit of volatility. If you would invest 2,192 in FLOW TRADERS LTD on August 25, 2024 and sell it today you would lose (16.00) from holding FLOW TRADERS LTD or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK CENTRAL ASIA vs. FLOW TRADERS LTD
Performance |
| Timeline |
| BANK CENTRAL ASIA |
| FLOW TRADERS LTD |
BANK CENTRAL and FLOW TRADERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK CENTRAL and FLOW TRADERS
The main advantage of trading using opposite BANK CENTRAL and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK CENTRAL position performs unexpectedly, FLOW TRADERS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in FLOW TRADERS will offset losses from the drop in FLOW TRADERS's long position.| BANK CENTRAL vs. Apple Inc | BANK CENTRAL vs. Apple Inc | BANK CENTRAL vs. Apple Inc | BANK CENTRAL vs. Apple Inc |
| FLOW TRADERS vs. Insurance Australia Group | FLOW TRADERS vs. MACOM Technology Solutions | FLOW TRADERS vs. HANOVER INSURANCE | FLOW TRADERS vs. Reinsurance Group of |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |