Correlation Between BG Foods and CPU SOFTWAREHOUSE
Can any of the company-specific risk be diversified away by investing in both BG Foods and CPU SOFTWAREHOUSE 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 BG Foods and CPU SOFTWAREHOUSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BG Foods and CPU SOFTWAREHOUSE, you can compare the effects of market volatilities on BG Foods and CPU SOFTWAREHOUSE 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 BG Foods with a short position of CPU SOFTWAREHOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BG Foods and CPU SOFTWAREHOUSE.
Diversification Opportunities for BG Foods and CPU SOFTWAREHOUSE
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DHR and CPU is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding BG Foods and CPU SOFTWAREHOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPU SOFTWAREHOUSE and BG Foods 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 BG Foods are associated (or correlated) with CPU SOFTWAREHOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPU SOFTWAREHOUSE has no effect on the direction of BG Foods i.e., BG Foods and CPU SOFTWAREHOUSE go up and down completely randomly.
Pair Corralation between BG Foods and CPU SOFTWAREHOUSE
Assuming the 90 days trading horizon BG Foods is expected to generate 0.85 times more return on investment than CPU SOFTWAREHOUSE. However, BG Foods is 1.18 times less risky than CPU SOFTWAREHOUSE. It trades about -0.02 of its potential returns per unit of risk. CPU SOFTWAREHOUSE is currently generating about -0.02 per unit of risk. If you would invest 1,093 in BG Foods on October 11, 2024 and sell it today you would lose (444.00) from holding BG Foods or give up 40.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BG Foods vs. CPU SOFTWAREHOUSE
Performance |
| Timeline |
| BG Foods |
| CPU SOFTWAREHOUSE |
BG Foods and CPU SOFTWAREHOUSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BG Foods and CPU SOFTWAREHOUSE
The main advantage of trading using opposite BG Foods and CPU SOFTWAREHOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BG Foods position performs unexpectedly, CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE will offset losses from the drop in CPU SOFTWAREHOUSE's long position.| BG Foods vs. Aristocrat Leisure Limited | BG Foods vs. NAKED WINES PLC | BG Foods vs. PLAYWAY SA ZY 10 | BG Foods vs. VARIOUS EATERIES LS |
| CPU SOFTWAREHOUSE vs. BG Foods | CPU SOFTWAREHOUSE vs. EMPEROR ENT HOTEL | CPU SOFTWAREHOUSE vs. EBRO FOODS | CPU SOFTWAREHOUSE vs. Dalata Hotel Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |