Correlation Between BII Railway and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both BII Railway and STORE ELECTRONIC 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 BII Railway and STORE ELECTRONIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BII Railway Transportation and STORE ELECTRONIC, you can compare the effects of market volatilities on BII Railway and STORE ELECTRONIC 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 BII Railway with a short position of STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and STORE ELECTRONIC.
Diversification Opportunities for BII Railway and STORE ELECTRONIC
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between BII and STORE is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BII Railway Transportation and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC and BII Railway 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 BII Railway Transportation are associated (or correlated) with STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of BII Railway i.e., BII Railway and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between BII Railway and STORE ELECTRONIC
Assuming the 90 days horizon BII Railway Transportation is expected to generate 0.87 times more return on investment than STORE ELECTRONIC. However, BII Railway Transportation is 1.15 times less risky than STORE ELECTRONIC. It trades about -0.04 of its potential returns per unit of risk. STORE ELECTRONIC is currently generating about -0.05 per unit of risk. If you would invest 2.65 in BII Railway Transportation on September 13, 2024 and sell it today you would lose (0.05) from holding BII Railway Transportation or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BII Railway Transportation vs. STORE ELECTRONIC
Performance |
| Timeline |
| BII Railway Transpor |
| STORE ELECTRONIC |
BII Railway and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BII Railway and STORE ELECTRONIC
The main advantage of trading using opposite BII Railway and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BII Railway position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| BII Railway vs. Cognizant Technology Solutions | BII Railway vs. Superior Plus Corp | BII Railway vs. SIVERS SEMICONDUCTORS AB | BII Railway vs. Norsk Hydro ASA |
| STORE ELECTRONIC vs. Apple Inc | STORE ELECTRONIC vs. Apple Inc | STORE ELECTRONIC vs. Apple Inc | STORE ELECTRONIC vs. Apple Inc |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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