Correlation Between Challenger and Beston Global
Can any of the company-specific risk be diversified away by investing in both Challenger and Beston Global 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 Challenger and Beston Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Challenger and Beston Global Food, you can compare the effects of market volatilities on Challenger and Beston Global 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 Challenger with a short position of Beston Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Challenger and Beston Global.
Diversification Opportunities for Challenger and Beston Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Challenger and Beston is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Challenger and Beston Global Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beston Global Food and Challenger 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 Challenger are associated (or correlated) with Beston Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beston Global Food has no effect on the direction of Challenger i.e., Challenger and Beston Global go up and down completely randomly.
Pair Corralation between Challenger and Beston Global
Assuming the 90 days trading horizon Challenger is expected to under-perform the Beston Global. But the stock apears to be less risky and, when comparing its historical volatility, Challenger is 6.32 times less risky than Beston Global. The stock trades about -0.01 of its potential returns per unit of risk. The Beston Global Food is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Beston Global Food on September 13, 2024 and sell it today you would lose (2.20) from holding Beston Global Food or give up 88.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Challenger vs. Beston Global Food
Performance |
| Timeline |
| Challenger |
| Beston Global Food |
Challenger and Beston Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Challenger and Beston Global
The main advantage of trading using opposite Challenger and Beston Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Challenger position performs unexpectedly, Beston Global 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 Beston Global will offset losses from the drop in Beston Global's long position.| Challenger vs. Ainsworth Game Technology | Challenger vs. oOhMedia | Challenger vs. Retail Food Group | Challenger vs. Treasury Wine Estates |
| Beston Global vs. Aneka Tambang Tbk | Beston Global vs. Macquarie Group | Beston Global vs. Macquarie Group Ltd | Beston Global vs. Challenger |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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