Correlation Between Bank Central and Concrete Leveling
Can any of the company-specific risk be diversified away by investing in both Bank Central and Concrete Leveling 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 Concrete Leveling 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 Concrete Leveling Systems, you can compare the effects of market volatilities on Bank Central and Concrete Leveling 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 Concrete Leveling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Concrete Leveling.
Diversification Opportunities for Bank Central and Concrete Leveling
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Concrete is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Concrete Leveling Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concrete Leveling Systems 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 Concrete Leveling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concrete Leveling Systems has no effect on the direction of Bank Central i.e., Bank Central and Concrete Leveling go up and down completely randomly.
Pair Corralation between Bank Central and Concrete Leveling
Assuming the 90 days horizon Bank Central is expected to generate 23.12 times less return on investment than Concrete Leveling. But when comparing it to its historical volatility, Bank Central Asia is 13.56 times less risky than Concrete Leveling. It trades about 0.04 of its potential returns per unit of risk. Concrete Leveling Systems is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 269.00 in Concrete Leveling Systems on August 30, 2024 and sell it today you would lose (205.00) from holding Concrete Leveling Systems or give up 76.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. Concrete Leveling Systems
Performance |
| Timeline |
| Bank Central Asia |
| Concrete Leveling Systems |
Bank Central and Concrete Leveling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Concrete Leveling
The main advantage of trading using opposite Bank Central and Concrete Leveling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Concrete Leveling 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 Concrete Leveling will offset losses from the drop in Concrete Leveling'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 |
| Concrete Leveling vs. Buhler Industries | Concrete Leveling vs. Ag Growth International | Concrete Leveling vs. Grow Solutions Holdings | Concrete Leveling vs. American Premium Water |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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