Correlation Between Country Group and BJC Heavy
Can any of the company-specific risk be diversified away by investing in both Country Group and BJC Heavy 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 Country Group and BJC Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Country Group Holdings and BJC Heavy Industries, you can compare the effects of market volatilities on Country Group and BJC Heavy 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 Country Group with a short position of BJC Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Country Group and BJC Heavy.
Diversification Opportunities for Country Group and BJC Heavy
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Country and BJC is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Country Group Holdings and BJC Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJC Heavy Industries and Country Group 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 Country Group Holdings are associated (or correlated) with BJC Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJC Heavy Industries has no effect on the direction of Country Group i.e., Country Group and BJC Heavy go up and down completely randomly.
Pair Corralation between Country Group and BJC Heavy
Assuming the 90 days trading horizon Country Group Holdings is expected to generate 1.0 times more return on investment than BJC Heavy. However, Country Group is 1.0 times more volatile than BJC Heavy Industries. It trades about 0.04 of its potential returns per unit of risk. BJC Heavy Industries is currently generating about 0.04 per unit of risk. If you would invest 65.00 in Country Group Holdings on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Country Group Holdings or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Country Group Holdings vs. BJC Heavy Industries
Performance |
| Timeline |
| Country Group Holdings |
| BJC Heavy Industries |
Country Group and BJC Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Country Group and BJC Heavy
The main advantage of trading using opposite Country Group and BJC Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Country Group position performs unexpectedly, BJC Heavy 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 BJC Heavy will offset losses from the drop in BJC Heavy's long position.| Country Group vs. Asia Plus Group | Country Group vs. Globlex Holding Management | Country Group vs. Asia Green Energy | Country Group vs. Amanah Leasing Public |
| BJC Heavy vs. CH Karnchang Public | BJC Heavy vs. Asia Aviation Public | BJC Heavy vs. AAPICO Hitech Public | BJC Heavy vs. GFPT Public |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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