Correlation Between SAF Special and BPS TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both SAF Special and BPS TECHNOLOGY 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 SAF Special and BPS TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAF Special Steel and BPS TECHNOLOGY PUBLIC, you can compare the effects of market volatilities on SAF Special and BPS TECHNOLOGY 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 SAF Special with a short position of BPS TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAF Special and BPS TECHNOLOGY.
Diversification Opportunities for SAF Special and BPS TECHNOLOGY
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAF and BPS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SAF Special Steel and BPS TECHNOLOGY PUBLIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BPS TECHNOLOGY PUBLIC and SAF Special 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 SAF Special Steel are associated (or correlated) with BPS TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BPS TECHNOLOGY PUBLIC has no effect on the direction of SAF Special i.e., SAF Special and BPS TECHNOLOGY go up and down completely randomly.
Pair Corralation between SAF Special and BPS TECHNOLOGY
Assuming the 90 days trading horizon SAF Special Steel is expected to generate 0.73 times more return on investment than BPS TECHNOLOGY. However, SAF Special Steel is 1.38 times less risky than BPS TECHNOLOGY. It trades about -0.03 of its potential returns per unit of risk. BPS TECHNOLOGY PUBLIC is currently generating about -0.04 per unit of risk. If you would invest 73.00 in SAF Special Steel on September 3, 2024 and sell it today you would lose (18.00) from holding SAF Special Steel or give up 24.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAF Special Steel vs. BPS TECHNOLOGY PUBLIC
Performance |
| Timeline |
| SAF Special Steel |
| BPS TECHNOLOGY PUBLIC |
SAF Special and BPS TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAF Special and BPS TECHNOLOGY
The main advantage of trading using opposite SAF Special and BPS TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAF Special position performs unexpectedly, BPS TECHNOLOGY 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 BPS TECHNOLOGY will offset losses from the drop in BPS TECHNOLOGY's long position.| SAF Special vs. Diamond Building Products | SAF Special vs. MCS Steel Public | SAF Special vs. Asia Green Energy | SAF Special vs. Hwa Fong Rubber |
| BPS TECHNOLOGY vs. Delta Electronics Public | BPS TECHNOLOGY vs. Delta Electronics Public | BPS TECHNOLOGY vs. Airports of Thailand | BPS TECHNOLOGY vs. Airports of Thailand |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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