Correlation Between Minor International and BGrimm Power
Can any of the company-specific risk be diversified away by investing in both Minor International and BGrimm Power 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 Minor International and BGrimm Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minor International Public and BGrimm Power Public, you can compare the effects of market volatilities on Minor International and BGrimm Power 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 Minor International with a short position of BGrimm Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minor International and BGrimm Power.
Diversification Opportunities for Minor International and BGrimm Power
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Minor and BGrimm is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Minor International Public and BGrimm Power Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGrimm Power Public and Minor International 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 Minor International Public are associated (or correlated) with BGrimm Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGrimm Power Public has no effect on the direction of Minor International i.e., Minor International and BGrimm Power go up and down completely randomly.
Pair Corralation between Minor International and BGrimm Power
Assuming the 90 days trading horizon Minor International Public is expected to generate 0.76 times more return on investment than BGrimm Power. However, Minor International Public is 1.32 times less risky than BGrimm Power. It trades about -0.03 of its potential returns per unit of risk. BGrimm Power Public is currently generating about -0.06 per unit of risk. If you would invest 3,334 in Minor International Public on September 2, 2024 and sell it today you would lose (659.00) from holding Minor International Public or give up 19.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minor International Public vs. BGrimm Power Public
Performance |
| Timeline |
| Minor International |
| BGrimm Power Public |
Minor International and BGrimm Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minor International and BGrimm Power
The main advantage of trading using opposite Minor International and BGrimm Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minor International position performs unexpectedly, BGrimm Power 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 BGrimm Power will offset losses from the drop in BGrimm Power's long position.| Minor International vs. TRC Construction Public | Minor International vs. Bangkok Expressway and | Minor International vs. Lohakit Metal Public | Minor International vs. Gunkul Engineering Public |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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