Correlation Between Converge Information and Bright Kindle
Can any of the company-specific risk be diversified away by investing in both Converge Information and Bright Kindle 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 Converge Information and Bright Kindle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Converge Information Communications and Bright Kindle Resources, you can compare the effects of market volatilities on Converge Information and Bright Kindle 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 Converge Information with a short position of Bright Kindle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Information and Bright Kindle.
Diversification Opportunities for Converge Information and Bright Kindle
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Converge and Bright is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Converge Information Communica and Bright Kindle Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Kindle Resources and Converge Information 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 Converge Information Communications are associated (or correlated) with Bright Kindle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Kindle Resources has no effect on the direction of Converge Information i.e., Converge Information and Bright Kindle go up and down completely randomly.
Pair Corralation between Converge Information and Bright Kindle
Assuming the 90 days trading horizon Converge Information Communications is expected to generate 0.64 times more return on investment than Bright Kindle. However, Converge Information Communications is 1.57 times less risky than Bright Kindle. It trades about 0.02 of its potential returns per unit of risk. Bright Kindle Resources is currently generating about -0.01 per unit of risk. If you would invest 1,583 in Converge Information Communications on August 29, 2024 and sell it today you would earn a total of 77.00 from holding Converge Information Communications or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.17% |
| Values | Daily Returns |
Converge Information Communica vs. Bright Kindle Resources
Performance |
| Timeline |
| Converge Information |
| Bright Kindle Resources |
Converge Information and Bright Kindle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Converge Information and Bright Kindle
The main advantage of trading using opposite Converge Information and Bright Kindle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Information position performs unexpectedly, Bright Kindle 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 Bright Kindle will offset losses from the drop in Bright Kindle's long position.| Converge Information vs. Globe Telecom | Converge Information vs. Century Pacific Food | Converge Information vs. Semirara Mining Corp | Converge Information vs. Top Frontier Investment |
| Bright Kindle vs. Allhome Corp | Bright Kindle vs. Jollibee Foods Corp | Bright Kindle vs. LFM Properties Corp | Bright Kindle vs. PXP Energy Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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