Correlation Between Bank Central and Lexaria Bioscience
Can any of the company-specific risk be diversified away by investing in both Bank Central and Lexaria Bioscience 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 Lexaria Bioscience 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 Lexaria Bioscience Corp, you can compare the effects of market volatilities on Bank Central and Lexaria Bioscience 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 Lexaria Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Lexaria Bioscience.
Diversification Opportunities for Bank Central and Lexaria Bioscience
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Lexaria is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Lexaria Bioscience Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexaria Bioscience Corp 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 Lexaria Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexaria Bioscience Corp has no effect on the direction of Bank Central i.e., Bank Central and Lexaria Bioscience go up and down completely randomly.
Pair Corralation between Bank Central and Lexaria Bioscience
Assuming the 90 days horizon Bank Central Asia is expected to generate 0.33 times more return on investment than Lexaria Bioscience. However, Bank Central Asia is 3.05 times less risky than Lexaria Bioscience. It trades about -0.22 of its potential returns per unit of risk. Lexaria Bioscience Corp is currently generating about -0.29 per unit of risk. If you would invest 1,510 in Bank Central Asia on November 4, 2024 and sell it today you would lose (80.00) from holding Bank Central Asia or give up 5.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. Lexaria Bioscience Corp
Performance |
| Timeline |
| Bank Central Asia |
| Lexaria Bioscience Corp |
Bank Central and Lexaria Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Lexaria Bioscience
The main advantage of trading using opposite Bank Central and Lexaria Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Lexaria Bioscience 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 Lexaria Bioscience will offset losses from the drop in Lexaria Bioscience's long position.| Bank Central vs. Banco De Chile | Bank Central vs. Banco Santander Brasil | Bank Central vs. CrossFirst Bankshares | Bank Central vs. Banco Bradesco SA |
| Lexaria Bioscience vs. Revelation Biosciences | Lexaria Bioscience vs. Zura Bio Limited | Lexaria Bioscience vs. Phio Pharmaceuticals Corp | Lexaria Bioscience vs. ZyVersa Therapeutics |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |