Correlation Between Retail Food and BSP Financial
Can any of the company-specific risk be diversified away by investing in both Retail Food 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 Retail Food and BSP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Food Group and BSP Financial Group, you can compare the effects of market volatilities on Retail Food 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 Retail Food with a short position of BSP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Food and BSP Financial.
Diversification Opportunities for Retail Food and BSP Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Retail and BSP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Retail Food Group 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 Retail Food 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 Retail Food Group 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 Retail Food i.e., Retail Food and BSP Financial go up and down completely randomly.
Pair Corralation between Retail Food and BSP Financial
Assuming the 90 days trading horizon Retail Food Group is expected to generate 1.71 times more return on investment than BSP Financial. However, Retail Food is 1.71 times more volatile than BSP Financial Group. It trades about 0.05 of its potential returns per unit of risk. BSP Financial Group is currently generating about 0.06 per unit of risk. If you would invest 5.00 in Retail Food Group on August 31, 2024 and sell it today you would earn a total of 2.20 from holding Retail Food Group or generate 44.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Food Group vs. BSP Financial Group
Performance |
| Timeline |
| Retail Food Group |
| BSP Financial Group |
Retail Food and BSP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Food and BSP Financial
The main advantage of trading using opposite Retail Food and BSP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Food 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.| Retail Food vs. Aurelia Metals | Retail Food vs. Ora Banda Mining | Retail Food vs. Black Rock Mining | Retail Food vs. Stelar Metals |
| BSP Financial vs. K2 Asset Management | BSP Financial vs. Mount Gibson Iron | BSP Financial vs. Bluescope Steel | BSP Financial vs. Hawsons Iron |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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