Correlation Between Image Protect and BHPA
Can any of the company-specific risk be diversified away by investing in both Image Protect and BHPA 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 Image Protect and BHPA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Image Protect and BHPA Inc, you can compare the effects of market volatilities on Image Protect and BHPA 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 Image Protect with a short position of BHPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Image Protect and BHPA.
Diversification Opportunities for Image Protect and BHPA
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Image and BHPA is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Image Protect and BHPA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHPA Inc and Image Protect 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 Image Protect are associated (or correlated) with BHPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHPA Inc has no effect on the direction of Image Protect i.e., Image Protect and BHPA go up and down completely randomly.
Pair Corralation between Image Protect and BHPA
Given the investment horizon of 90 days Image Protect is expected to generate 3.84 times more return on investment than BHPA. However, Image Protect is 3.84 times more volatile than BHPA Inc. It trades about 0.11 of its potential returns per unit of risk. BHPA Inc is currently generating about 0.05 per unit of risk. If you would invest 0.03 in Image Protect on August 28, 2024 and sell it today you would lose (0.01) from holding Image Protect or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Image Protect vs. BHPA Inc
Performance |
| Timeline |
| Image Protect |
| BHPA Inc |
Image Protect and BHPA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Image Protect and BHPA
The main advantage of trading using opposite Image Protect and BHPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Image Protect position performs unexpectedly, BHPA 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 BHPA will offset losses from the drop in BHPA's long position.| Image Protect vs. Salesforce | Image Protect vs. SAP SE ADR | Image Protect vs. ServiceNow | Image Protect vs. Intuit Inc |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |