Correlation Between Perpetual Credit and BSP Financial
Can any of the company-specific risk be diversified away by investing in both Perpetual Credit and BSP Financial 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 Perpetual Credit and BSP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perpetual Credit Income and BSP Financial Group, you can compare the effects of market volatilities on Perpetual Credit and BSP Financial 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 Perpetual Credit with a short position of BSP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perpetual Credit and BSP Financial.
Diversification Opportunities for Perpetual Credit and BSP Financial
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Perpetual and BSP is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Perpetual Credit Income and BSP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSP Financial Group and Perpetual Credit 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 Perpetual Credit Income are associated (or correlated) with BSP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSP Financial Group has no effect on the direction of Perpetual Credit i.e., Perpetual Credit and BSP Financial go up and down completely randomly.
Pair Corralation between Perpetual Credit and BSP Financial
Assuming the 90 days trading horizon Perpetual Credit is expected to generate 33.31 times less return on investment than BSP Financial. But when comparing it to its historical volatility, Perpetual Credit Income is 1.5 times less risky than BSP Financial. It trades about 0.01 of its potential returns per unit of risk. BSP Financial Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 620.00 in BSP Financial Group on September 13, 2024 and sell it today you would earn a total of 29.00 from holding BSP Financial Group or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perpetual Credit Income vs. BSP Financial Group
Performance |
| Timeline |
| Perpetual Credit Income |
| BSP Financial Group |
Perpetual Credit and BSP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perpetual Credit and BSP Financial
The main advantage of trading using opposite Perpetual Credit and BSP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perpetual Credit position performs unexpectedly, BSP Financial 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 BSP Financial will offset losses from the drop in BSP Financial's long position.| Perpetual Credit vs. Embark Education Group | Perpetual Credit vs. Carnegie Clean Energy | Perpetual Credit vs. Autosports Group | Perpetual Credit vs. Energy Technologies Limited |
| BSP Financial vs. Stelar Metals | BSP Financial vs. Truscott Mining Corp | BSP Financial vs. Iron Road | BSP Financial vs. Falcon Metals |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |