Correlation Between VGI Public and BTS Group
Can any of the company-specific risk be diversified away by investing in both VGI Public and BTS Group 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 VGI Public and BTS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VGI Public and BTS Group Holdings, you can compare the effects of market volatilities on VGI Public and BTS Group 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 VGI Public with a short position of BTS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of VGI Public and BTS Group.
Diversification Opportunities for VGI Public and BTS Group
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VGI and BTS is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding VGI Public and BTS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTS Group Holdings and VGI Public 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 VGI Public are associated (or correlated) with BTS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTS Group Holdings has no effect on the direction of VGI Public i.e., VGI Public and BTS Group go up and down completely randomly.
Pair Corralation between VGI Public and BTS Group
Assuming the 90 days trading horizon VGI Public is expected to under-perform the BTS Group. In addition to that, VGI Public is 2.3 times more volatile than BTS Group Holdings. It trades about -0.01 of its total potential returns per unit of risk. BTS Group Holdings is currently generating about 0.18 per unit of volatility. If you would invest 466.00 in BTS Group Holdings on August 26, 2024 and sell it today you would earn a total of 32.00 from holding BTS Group Holdings or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VGI Public vs. BTS Group Holdings
Performance |
| Timeline |
| VGI Public |
| BTS Group Holdings |
VGI Public and BTS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VGI Public and BTS Group
The main advantage of trading using opposite VGI Public and BTS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VGI Public position performs unexpectedly, BTS Group 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 BTS Group will offset losses from the drop in BTS Group's long position.| VGI Public vs. BTS Group Holdings | VGI Public vs. WHA Public | VGI Public vs. Plan B Media | VGI Public vs. Gulf Energy Development |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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