Correlation Between Christiani Nielsen and BJC Heavy
Can any of the company-specific risk be diversified away by investing in both Christiani Nielsen 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 Christiani Nielsen and BJC Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Christiani Nielsen Public and BJC Heavy Industries, you can compare the effects of market volatilities on Christiani Nielsen 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 Christiani Nielsen with a short position of BJC Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Christiani Nielsen and BJC Heavy.
Diversification Opportunities for Christiani Nielsen and BJC Heavy
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Christiani and BJC is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Christiani Nielsen Public 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 Christiani Nielsen 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 Christiani Nielsen Public 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 Christiani Nielsen i.e., Christiani Nielsen and BJC Heavy go up and down completely randomly.
Pair Corralation between Christiani Nielsen and BJC Heavy
Assuming the 90 days trading horizon Christiani Nielsen Public is expected to under-perform the BJC Heavy. In addition to that, Christiani Nielsen is 1.2 times more volatile than BJC Heavy Industries. It trades about -0.37 of its total potential returns per unit of risk. BJC Heavy Industries is currently generating about -0.25 per unit of volatility. If you would invest 131.00 in BJC Heavy Industries on August 30, 2024 and sell it today you would lose (11.00) from holding BJC Heavy Industries or give up 8.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Christiani Nielsen Public vs. BJC Heavy Industries
Performance |
| Timeline |
| Christiani Nielsen Public |
| BJC Heavy Industries |
Christiani Nielsen and BJC Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Christiani Nielsen and BJC Heavy
The main advantage of trading using opposite Christiani Nielsen and BJC Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Christiani Nielsen 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.| Christiani Nielsen vs. CH Karnchang Public | Christiani Nielsen vs. Italian Thai Development Public | Christiani Nielsen vs. EMC Public | Christiani Nielsen vs. AAPICO Hitech 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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