Correlation Between E Split and Bce
Can any of the company-specific risk be diversified away by investing in both E Split and Bce 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 E Split and Bce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Split Corp and Bce Inc Pref, you can compare the effects of market volatilities on E Split and Bce 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 E Split with a short position of Bce. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Split and Bce.
Diversification Opportunities for E Split and Bce
Pay attention - limited upside
The 3 months correlation between ENS-PA and Bce is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding E Split Corp and Bce Inc Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bce Inc Pref and E Split 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 E Split Corp are associated (or correlated) with Bce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bce Inc Pref has no effect on the direction of E Split i.e., E Split and Bce go up and down completely randomly.
Pair Corralation between E Split and Bce
Assuming the 90 days trading horizon E Split Corp is expected to under-perform the Bce. But the preferred stock apears to be less risky and, when comparing its historical volatility, E Split Corp is 1.11 times less risky than Bce. The preferred stock trades about -0.05 of its potential returns per unit of risk. The Bce Inc Pref is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,583 in Bce Inc Pref on September 27, 2024 and sell it today you would earn a total of 17.00 from holding Bce Inc Pref or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
E Split Corp vs. Bce Inc Pref
Performance |
| Timeline |
| E Split Corp |
| Bce Inc Pref |
E Split and Bce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Split and Bce
The main advantage of trading using opposite E Split and Bce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Split position performs unexpectedly, Bce 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 Bce will offset losses from the drop in Bce's long position.| E Split vs. High Liner Foods | E Split vs. Queens Road Capital | E Split vs. Calian Technologies | E Split vs. Champion Gaming 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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