Correlation Between Latitude Financial and BSP Financial
Can any of the company-specific risk be diversified away by investing in both Latitude Financial 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 Latitude Financial and BSP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Latitude Financial Services and BSP Financial Group, you can compare the effects of market volatilities on Latitude Financial 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 Latitude Financial with a short position of BSP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Latitude Financial and BSP Financial.
Diversification Opportunities for Latitude Financial and BSP Financial
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Latitude and BSP is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Latitude Financial Services 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 Latitude Financial 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 Latitude Financial Services 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 Latitude Financial i.e., Latitude Financial and BSP Financial go up and down completely randomly.
Pair Corralation between Latitude Financial and BSP Financial
Assuming the 90 days trading horizon Latitude Financial is expected to generate 318.86 times less return on investment than BSP Financial. But when comparing it to its historical volatility, Latitude Financial Services is 4.7 times less risky than BSP Financial. It trades about 0.0 of its potential returns per unit of risk. BSP Financial Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 620.00 in BSP Financial Group on September 13, 2024 and sell it today you would earn a total of 29.00 from holding BSP Financial Group or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Latitude Financial Services vs. BSP Financial Group
Performance |
| Timeline |
| Latitude Financial |
| BSP Financial Group |
Latitude Financial and BSP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Latitude Financial and BSP Financial
The main advantage of trading using opposite Latitude Financial and BSP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Latitude Financial 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.| Latitude Financial vs. Aneka Tambang Tbk | Latitude Financial vs. Commonwealth Bank | Latitude Financial vs. BHP Group Limited | Latitude Financial vs. Rio Tinto |
| BSP Financial vs. Stelar Metals | BSP Financial vs. Truscott Mining Corp | BSP Financial vs. Iron Road | BSP Financial vs. Falcon Metals |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |