Correlation Between Bank Central and Brilliant Acquisition
Can any of the company-specific risk be diversified away by investing in both Bank Central and Brilliant Acquisition 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 Bank Central and Brilliant Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Brilliant Acquisition Corp, you can compare the effects of market volatilities on Bank Central and Brilliant Acquisition 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 Bank Central with a short position of Brilliant Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Brilliant Acquisition.
Diversification Opportunities for Bank Central and Brilliant Acquisition
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Brilliant is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Brilliant Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brilliant Acquisition and Bank Central 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 Bank Central Asia are associated (or correlated) with Brilliant Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brilliant Acquisition has no effect on the direction of Bank Central i.e., Bank Central and Brilliant Acquisition go up and down completely randomly.
Pair Corralation between Bank Central and Brilliant Acquisition
Assuming the 90 days horizon Bank Central is expected to generate 1.24 times less return on investment than Brilliant Acquisition. In addition to that, Bank Central is 2.38 times more volatile than Brilliant Acquisition Corp. It trades about 0.04 of its total potential returns per unit of risk. Brilliant Acquisition Corp is currently generating about 0.1 per unit of volatility. If you would invest 1,060 in Brilliant Acquisition Corp on August 30, 2024 and sell it today you would earn a total of 98.00 from holding Brilliant Acquisition Corp or generate 9.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.31% |
| Values | Daily Returns |
Bank Central Asia vs. Brilliant Acquisition Corp
Performance |
| Timeline |
| Bank Central Asia |
| Brilliant Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Central and Brilliant Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Brilliant Acquisition
The main advantage of trading using opposite Bank Central and Brilliant Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Brilliant Acquisition 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 Brilliant Acquisition will offset losses from the drop in Brilliant Acquisition's long position.| Bank Central vs. Israel Discount Bank | Bank Central vs. Baraboo Bancorporation | Bank Central vs. Danske Bank AS | Bank Central vs. Jyske Bank AS |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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