Correlation Between Mena Transport and BPS TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Mena Transport and BPS TECHNOLOGY 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 Mena Transport and BPS TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mena Transport Public and BPS TECHNOLOGY PUBLIC, you can compare the effects of market volatilities on Mena Transport and BPS TECHNOLOGY 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 Mena Transport with a short position of BPS TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mena Transport and BPS TECHNOLOGY.
Diversification Opportunities for Mena Transport and BPS TECHNOLOGY
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mena and BPS is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mena Transport Public and BPS TECHNOLOGY PUBLIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BPS TECHNOLOGY PUBLIC and Mena Transport 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 Mena Transport Public are associated (or correlated) with BPS TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BPS TECHNOLOGY PUBLIC has no effect on the direction of Mena Transport i.e., Mena Transport and BPS TECHNOLOGY go up and down completely randomly.
Pair Corralation between Mena Transport and BPS TECHNOLOGY
Assuming the 90 days trading horizon Mena Transport Public is expected to under-perform the BPS TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, Mena Transport Public is 1.0 times less risky than BPS TECHNOLOGY. The stock trades about -0.14 of its potential returns per unit of risk. The BPS TECHNOLOGY PUBLIC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 50.00 in BPS TECHNOLOGY PUBLIC on November 30, 2024 and sell it today you would earn a total of 2.00 from holding BPS TECHNOLOGY PUBLIC or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mena Transport Public vs. BPS TECHNOLOGY PUBLIC
Performance |
| Timeline |
| Mena Transport Public |
| BPS TECHNOLOGY PUBLIC |
Mena Transport and BPS TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mena Transport and BPS TECHNOLOGY
The main advantage of trading using opposite Mena Transport and BPS TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mena Transport position performs unexpectedly, BPS TECHNOLOGY 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 BPS TECHNOLOGY will offset losses from the drop in BPS TECHNOLOGY's long position.| Mena Transport vs. Mono Next Public | Mena Transport vs. Triple i Logistics | Mena Transport vs. Dynasty Ceramic Public |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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