Correlation Between Bank Central and PlantFuel Life
Can any of the company-specific risk be diversified away by investing in both Bank Central and PlantFuel Life 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 PlantFuel Life 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 PlantFuel Life, you can compare the effects of market volatilities on Bank Central and PlantFuel Life 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 PlantFuel Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and PlantFuel Life.
Diversification Opportunities for Bank Central and PlantFuel Life
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and PlantFuel is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and PlantFuel Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlantFuel Life 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 PlantFuel Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlantFuel Life has no effect on the direction of Bank Central i.e., Bank Central and PlantFuel Life go up and down completely randomly.
Pair Corralation between Bank Central and PlantFuel Life
Assuming the 90 days horizon Bank Central Asia is expected to under-perform the PlantFuel Life. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Central Asia is 48.58 times less risky than PlantFuel Life. The pink sheet trades about -0.17 of its potential returns per unit of risk. The PlantFuel Life is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 0.07 in PlantFuel Life on September 2, 2024 and sell it today you would earn a total of 0.93 from holding PlantFuel Life or generate 1328.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank Central Asia vs. PlantFuel Life
Performance |
| Timeline |
| Bank Central Asia |
| PlantFuel Life |
Bank Central and PlantFuel Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and PlantFuel Life
The main advantage of trading using opposite Bank Central and PlantFuel Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, PlantFuel Life 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 PlantFuel Life will offset losses from the drop in PlantFuel Life's long position.| Bank Central vs. Nedbank Group | Bank Central vs. Standard Bank Group | Bank Central vs. Kasikornbank Public Co | Bank Central vs. KBC Groep NV |
| PlantFuel Life vs. The A2 Milk | PlantFuel Life vs. Artisan Consumer Goods | PlantFuel Life vs. General Mills |
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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