Correlation Between Consolidated Communications and BII Railway
Can any of the company-specific risk be diversified away by investing in both Consolidated Communications and BII Railway 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 Consolidated Communications and BII Railway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consolidated Communications Holdings and BII Railway Transportation, you can compare the effects of market volatilities on Consolidated Communications and BII Railway 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 Consolidated Communications with a short position of BII Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Communications and BII Railway.
Diversification Opportunities for Consolidated Communications and BII Railway
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Consolidated and BII is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Communications Ho and BII Railway Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BII Railway Transpor and Consolidated Communications 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 Consolidated Communications Holdings are associated (or correlated) with BII Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BII Railway Transpor has no effect on the direction of Consolidated Communications i.e., Consolidated Communications and BII Railway go up and down completely randomly.
Pair Corralation between Consolidated Communications and BII Railway
Assuming the 90 days horizon Consolidated Communications Holdings is expected to generate 0.78 times more return on investment than BII Railway. However, Consolidated Communications Holdings is 1.28 times less risky than BII Railway. It trades about 0.02 of its potential returns per unit of risk. BII Railway Transportation is currently generating about 0.01 per unit of risk. If you would invest 408.00 in Consolidated Communications Holdings on September 4, 2024 and sell it today you would earn a total of 34.00 from holding Consolidated Communications Holdings or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consolidated Communications Ho vs. BII Railway Transportation
Performance |
| Timeline |
| Consolidated Communications |
| BII Railway Transpor |
Consolidated Communications and BII Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consolidated Communications and BII Railway
The main advantage of trading using opposite Consolidated Communications and BII Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Communications position performs unexpectedly, BII Railway 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 BII Railway will offset losses from the drop in BII Railway's long position.| Consolidated Communications vs. T Mobile | Consolidated Communications vs. China Mobile Limited | Consolidated Communications vs. ATT Inc | Consolidated Communications vs. Nippon Telegraph and |
| BII Railway vs. FUJITSU LTD ADR | BII Railway vs. Superior Plus Corp | BII Railway vs. NMI Holdings | BII Railway vs. Origin Agritech |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |