Correlation Between Solid Impact and BCM Resources
Can any of the company-specific risk be diversified away by investing in both Solid Impact and BCM Resources 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 Solid Impact and BCM Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solid Impact Investments and BCM Resources Corp, you can compare the effects of market volatilities on Solid Impact and BCM Resources 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 Solid Impact with a short position of BCM Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solid Impact and BCM Resources.
Diversification Opportunities for Solid Impact and BCM Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Solid and BCM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Solid Impact Investments and BCM Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCM Resources Corp and Solid Impact 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 Solid Impact Investments are associated (or correlated) with BCM Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCM Resources Corp has no effect on the direction of Solid Impact i.e., Solid Impact and BCM Resources go up and down completely randomly.
Pair Corralation between Solid Impact and BCM Resources
Assuming the 90 days trading horizon Solid Impact Investments is expected to under-perform the BCM Resources. But the stock apears to be less risky and, when comparing its historical volatility, Solid Impact Investments is 2.91 times less risky than BCM Resources. The stock trades about -0.06 of its potential returns per unit of risk. The BCM Resources Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8.00 in BCM Resources Corp on September 18, 2024 and sell it today you would lose (3.50) from holding BCM Resources Corp or give up 43.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solid Impact Investments vs. BCM Resources Corp
Performance |
| Timeline |
| Solid Impact Investments |
| BCM Resources Corp |
Solid Impact and BCM Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solid Impact and BCM Resources
The main advantage of trading using opposite Solid Impact and BCM Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solid Impact position performs unexpectedly, BCM Resources 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 BCM Resources will offset losses from the drop in BCM Resources' long position.| Solid Impact vs. Berkshire Hathaway CDR | Solid Impact vs. E L Financial Corp | Solid Impact vs. E L Financial 3 | Solid Impact vs. Molson Coors Canada |
| BCM Resources vs. Xtract One Technologies | BCM Resources vs. Firan Technology Group | BCM Resources vs. Bip Investment Corp | BCM Resources vs. Solid Impact Investments |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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