Correlation Between Flagship Investments and BSP Financial
Can any of the company-specific risk be diversified away by investing in both Flagship Investments 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 Flagship Investments and BSP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flagship Investments and BSP Financial Group, you can compare the effects of market volatilities on Flagship Investments 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 Flagship Investments with a short position of BSP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flagship Investments and BSP Financial.
Diversification Opportunities for Flagship Investments and BSP Financial
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flagship and BSP is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Flagship Investments 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 Flagship Investments 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 Flagship Investments 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 Flagship Investments i.e., Flagship Investments and BSP Financial go up and down completely randomly.
Pair Corralation between Flagship Investments and BSP Financial
Assuming the 90 days trading horizon Flagship Investments is expected to generate 1.6 times less return on investment than BSP Financial. But when comparing it to its historical volatility, Flagship Investments is 1.7 times less risky than BSP Financial. It trades about 0.23 of its potential returns per unit of risk. BSP Financial Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 700.00 in BSP Financial Group on November 7, 2024 and sell it today you would earn a total of 53.00 from holding BSP Financial Group or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flagship Investments vs. BSP Financial Group
Performance |
| Timeline |
| Flagship Investments |
| BSP Financial Group |
Flagship Investments and BSP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flagship Investments and BSP Financial
The main advantage of trading using opposite Flagship Investments and BSP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flagship Investments 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.| Flagship Investments vs. Queste Communications | Flagship Investments vs. Beam Communications Holdings | Flagship Investments vs. Sonic Healthcare | Flagship Investments vs. Aussie Broadband |
| BSP Financial vs. Mach7 Technologies | BSP Financial vs. Ras Technology Holdings | BSP Financial vs. Macquarie Technology Group | BSP Financial vs. Beston Global Food |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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