Correlation Between PCCW and BCE
Can any of the company-specific risk be diversified away by investing in both PCCW and BCE 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 PCCW and BCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PCCW Limited and BCE Inc, you can compare the effects of market volatilities on PCCW and BCE 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 PCCW with a short position of BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCCW and BCE.
Diversification Opportunities for PCCW and BCE
Very weak diversification
The 3 months correlation between PCCW and BCE is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding PCCW Limited and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc and PCCW 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 PCCW Limited are associated (or correlated) with BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of PCCW i.e., PCCW and BCE go up and down completely randomly.
Pair Corralation between PCCW and BCE
Assuming the 90 days horizon PCCW Limited is expected to generate 2.68 times more return on investment than BCE. However, PCCW is 2.68 times more volatile than BCE Inc. It trades about 0.09 of its potential returns per unit of risk. BCE Inc is currently generating about -0.04 per unit of risk. If you would invest 581.00 in PCCW Limited on November 29, 2024 and sell it today you would earn a total of 48.00 from holding PCCW Limited or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PCCW Limited vs. BCE Inc
Performance |
| Timeline |
| PCCW Limited |
| BCE Inc |
PCCW and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PCCW and BCE
The main advantage of trading using opposite PCCW and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PCCW position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.| PCCW vs. PCCW Limited | PCCW vs. New World Development | PCCW vs. Guangdong Investment | PCCW vs. Bank of East |
| BCE vs. Rogers Communications | BCE vs. America Movil SAB | BCE vs. Telus Corp | BCE vs. Telefonica Brasil SA |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |