Correlation Between STORE ELECTRONIC and BECLE SAB
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC and BECLE SAB 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 STORE ELECTRONIC and BECLE SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STORE ELECTRONIC and BECLE SAB DE, you can compare the effects of market volatilities on STORE ELECTRONIC and BECLE SAB 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 STORE ELECTRONIC with a short position of BECLE SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and BECLE SAB.
Diversification Opportunities for STORE ELECTRONIC and BECLE SAB
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STORE and BECLE is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC and BECLE SAB DE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BECLE SAB DE and STORE ELECTRONIC 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 STORE ELECTRONIC are associated (or correlated) with BECLE SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BECLE SAB DE has no effect on the direction of STORE ELECTRONIC i.e., STORE ELECTRONIC and BECLE SAB go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and BECLE SAB
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to generate 0.55 times more return on investment than BECLE SAB. However, STORE ELECTRONIC is 1.8 times less risky than BECLE SAB. It trades about -0.05 of its potential returns per unit of risk. BECLE SAB DE is currently generating about -0.11 per unit of risk. If you would invest 14,460 in STORE ELECTRONIC on September 5, 2024 and sell it today you would lose (760.00) from holding STORE ELECTRONIC or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STORE ELECTRONIC vs. BECLE SAB DE
Performance |
| Timeline |
| STORE ELECTRONIC |
| BECLE SAB DE |
STORE ELECTRONIC and BECLE SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STORE ELECTRONIC and BECLE SAB
The main advantage of trading using opposite STORE ELECTRONIC and BECLE SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC position performs unexpectedly, BECLE SAB 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 BECLE SAB will offset losses from the drop in BECLE SAB's long position.| STORE ELECTRONIC vs. TOTAL GABON | STORE ELECTRONIC vs. Walgreens Boots Alliance | STORE ELECTRONIC vs. Peak Resources Limited |
| BECLE SAB vs. STORE ELECTRONIC | BECLE SAB vs. METHODE ELECTRONICS | BECLE SAB vs. Benchmark Electronics | BECLE SAB vs. UMC Electronics Co |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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