Correlation Between Santech Holdings and BCE
Can any of the company-specific risk be diversified away by investing in both Santech Holdings and BCE 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 Santech Holdings and BCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santech Holdings Limited and BCE Inc, you can compare the effects of market volatilities on Santech Holdings and BCE 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 Santech Holdings with a short position of BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santech Holdings and BCE.
Diversification Opportunities for Santech Holdings and BCE
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Santech and BCE is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Santech Holdings Limited and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc and Santech Holdings 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 Santech Holdings Limited are associated (or correlated) with BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of Santech Holdings i.e., Santech Holdings and BCE go up and down completely randomly.
Pair Corralation between Santech Holdings and BCE
Given the investment horizon of 90 days Santech Holdings Limited is expected to generate 11.43 times more return on investment than BCE. However, Santech Holdings is 11.43 times more volatile than BCE Inc. It trades about 0.09 of its potential returns per unit of risk. BCE Inc is currently generating about -0.41 per unit of risk. If you would invest 95.00 in Santech Holdings Limited on August 28, 2024 and sell it today you would earn a total of 5.00 from holding Santech Holdings Limited or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santech Holdings Limited vs. BCE Inc
Performance |
| Timeline |
| Santech Holdings |
| BCE Inc |
Santech Holdings and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santech Holdings and BCE
The main advantage of trading using opposite Santech Holdings and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santech Holdings position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.| Santech Holdings vs. Japan Tobacco ADR | Santech Holdings vs. Diageo PLC ADR | Santech Holdings vs. Compania Cervecerias Unidas | Santech Holdings vs. Willamette Valley Vineyards |
| BCE vs. Liberty Broadband Srs | BCE vs. Ribbon Communications | BCE vs. Liberty Broadband Srs | BCE vs. Shenandoah Telecommunications Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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