Correlation Between Strategem Capital and Brompton European
Can any of the company-specific risk be diversified away by investing in both Strategem Capital and Brompton European 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 Strategem Capital and Brompton European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategem Capital Corp and Brompton European Dividend, you can compare the effects of market volatilities on Strategem Capital and Brompton European 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 Strategem Capital with a short position of Brompton European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategem Capital and Brompton European.
Diversification Opportunities for Strategem Capital and Brompton European
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Strategem and Brompton is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Strategem Capital Corp and Brompton European Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton European and Strategem Capital 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 Strategem Capital Corp are associated (or correlated) with Brompton European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton European has no effect on the direction of Strategem Capital i.e., Strategem Capital and Brompton European go up and down completely randomly.
Pair Corralation between Strategem Capital and Brompton European
Assuming the 90 days horizon Strategem Capital Corp is expected to under-perform the Brompton European. In addition to that, Strategem Capital is 3.11 times more volatile than Brompton European Dividend. It trades about -0.05 of its total potential returns per unit of risk. Brompton European Dividend is currently generating about 0.01 per unit of volatility. If you would invest 1,061 in Brompton European Dividend on September 3, 2024 and sell it today you would earn a total of 9.00 from holding Brompton European Dividend or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategem Capital Corp vs. Brompton European Dividend
Performance |
| Timeline |
| Strategem Capital Corp |
| Brompton European |
Strategem Capital and Brompton European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategem Capital and Brompton European
The main advantage of trading using opposite Strategem Capital and Brompton European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategem Capital position performs unexpectedly, Brompton European 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 Brompton European will offset losses from the drop in Brompton European's long position.| Strategem Capital vs. Perseus Mining | Strategem Capital vs. TGS Esports | Strategem Capital vs. Ramp Metals | Strategem Capital vs. Precious Metals And |
| Brompton European vs. Brompton Global Dividend | Brompton European vs. Global Healthcare Income | Brompton European vs. Tech Leaders Income | Brompton European vs. Brompton North American |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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