Correlation Between Embark Education and BSP Financial
Can any of the company-specific risk be diversified away by investing in both Embark Education and BSP Financial 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 Embark Education and BSP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embark Education Group and BSP Financial Group, you can compare the effects of market volatilities on Embark Education and BSP Financial 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 Embark Education with a short position of BSP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embark Education and BSP Financial.
Diversification Opportunities for Embark Education and BSP Financial
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Embark and BSP is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Embark Education Group and BSP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSP Financial Group and Embark Education 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 Embark Education Group are associated (or correlated) with BSP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSP Financial Group has no effect on the direction of Embark Education i.e., Embark Education and BSP Financial go up and down completely randomly.
Pair Corralation between Embark Education and BSP Financial
Assuming the 90 days trading horizon Embark Education is expected to generate 103.62 times less return on investment than BSP Financial. But when comparing it to its historical volatility, Embark Education Group is 1.58 times less risky than BSP Financial. It trades about 0.01 of its potential returns per unit of risk. BSP Financial Group is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 666.00 in BSP Financial Group on November 1, 2024 and sell it today you would earn a total of 87.00 from holding BSP Financial Group or generate 13.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Embark Education Group vs. BSP Financial Group
Performance |
| Timeline |
| Embark Education |
| BSP Financial Group |
Embark Education and BSP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embark Education and BSP Financial
The main advantage of trading using opposite Embark Education and BSP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embark Education position performs unexpectedly, BSP Financial 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 BSP Financial will offset losses from the drop in BSP Financial's long position.| Embark Education vs. Djerriwarrh Investments | Embark Education vs. Flagship Investments | Embark Education vs. De Grey Mining | Embark Education vs. Duketon Mining |
| BSP Financial vs. Queste Communications | BSP Financial vs. G8 Education | BSP Financial vs. Embark Education Group | BSP Financial vs. Actinogen Medical |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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