Correlation Between Sriracha Construction and BPS TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Sriracha Construction 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 Sriracha Construction and BPS TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sriracha Construction Public and BPS TECHNOLOGY PUBLIC, you can compare the effects of market volatilities on Sriracha Construction 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 Sriracha Construction with a short position of BPS TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sriracha Construction and BPS TECHNOLOGY.
Diversification Opportunities for Sriracha Construction and BPS TECHNOLOGY
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sriracha and BPS is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Sriracha Construction Public 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 Sriracha Construction 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 Sriracha Construction Public 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 Sriracha Construction i.e., Sriracha Construction and BPS TECHNOLOGY go up and down completely randomly.
Pair Corralation between Sriracha Construction and BPS TECHNOLOGY
Assuming the 90 days trading horizon Sriracha Construction Public is expected to under-perform the BPS TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, Sriracha Construction Public is 1.9 times less risky than BPS TECHNOLOGY. The stock trades about -0.19 of its potential returns per unit of risk. The BPS TECHNOLOGY PUBLIC is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 66.00 in BPS TECHNOLOGY PUBLIC on August 29, 2024 and sell it today you would lose (13.00) from holding BPS TECHNOLOGY PUBLIC or give up 19.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sriracha Construction Public vs. BPS TECHNOLOGY PUBLIC
Performance |
| Timeline |
| Sriracha Construction |
| BPS TECHNOLOGY PUBLIC |
Sriracha Construction and BPS TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sriracha Construction and BPS TECHNOLOGY
The main advantage of trading using opposite Sriracha Construction and BPS TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sriracha Construction 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.| Sriracha Construction vs. MCS Steel Public | Sriracha Construction vs. Asia Plus Group | Sriracha Construction vs. Lalin Property Public | Sriracha Construction vs. Lam Soon Public |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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