Correlation Between Stock Exchange and BEC World
Can any of the company-specific risk be diversified away by investing in both Stock Exchange and BEC World 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 Stock Exchange and BEC World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stock Exchange Of and BEC World Public, you can compare the effects of market volatilities on Stock Exchange and BEC World 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 Stock Exchange with a short position of BEC World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stock Exchange and BEC World.
Diversification Opportunities for Stock Exchange and BEC World
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stock and BEC is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Stock Exchange Of and BEC World Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEC World Public and Stock Exchange 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 Stock Exchange Of are associated (or correlated) with BEC World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEC World Public has no effect on the direction of Stock Exchange i.e., Stock Exchange and BEC World go up and down completely randomly.
Pair Corralation between Stock Exchange and BEC World
Assuming the 90 days trading horizon Stock Exchange Of is expected to generate 0.45 times more return on investment than BEC World. However, Stock Exchange Of is 2.22 times less risky than BEC World. It trades about -0.04 of its potential returns per unit of risk. BEC World Public is currently generating about -0.21 per unit of risk. If you would invest 145,303 in Stock Exchange Of on August 28, 2024 and sell it today you would lose (972.00) from holding Stock Exchange Of or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stock Exchange Of vs. BEC World Public
Performance |
| Timeline |
Stock Exchange and BEC World Volatility Contrast
Predicted Return Density |
| Returns |
Stock Exchange Of
Pair trading matchups for Stock Exchange
BEC World Public
Pair trading matchups for BEC World
Pair Trading with Stock Exchange and BEC World
The main advantage of trading using opposite Stock Exchange and BEC World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stock Exchange position performs unexpectedly, BEC World 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 BEC World will offset losses from the drop in BEC World's long position.| Stock Exchange vs. Turnkey Communication Services | Stock Exchange vs. Winnergy Medical Public | Stock Exchange vs. Charoen Pokphand Foods | Stock Exchange vs. Information and Communication |
| BEC World vs. Indara Insurance Public | BEC World vs. Regional Container Lines | BEC World vs. Regional Container Lines | BEC World vs. Mahachai Hospital Public |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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