Correlation Between Vera Bradley and BCE
Can any of the company-specific risk be diversified away by investing in both Vera Bradley 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 Vera Bradley and BCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vera Bradley and BCE Inc, you can compare the effects of market volatilities on Vera Bradley 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 Vera Bradley with a short position of BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vera Bradley and BCE.
Diversification Opportunities for Vera Bradley and BCE
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vera and BCE is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Vera Bradley and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc and Vera Bradley 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 Vera Bradley 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 Vera Bradley i.e., Vera Bradley and BCE go up and down completely randomly.
Pair Corralation between Vera Bradley and BCE
Considering the 90-day investment horizon Vera Bradley is expected to generate 1.06 times more return on investment than BCE. However, Vera Bradley is 1.06 times more volatile than BCE Inc. It trades about 0.21 of its potential returns per unit of risk. BCE Inc is currently generating about -0.36 per unit of risk. If you would invest 521.00 in Vera Bradley on August 31, 2024 and sell it today you would earn a total of 56.00 from holding Vera Bradley or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vera Bradley vs. BCE Inc
Performance |
| Timeline |
| Vera Bradley |
| BCE Inc |
Vera Bradley and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vera Bradley and BCE
The main advantage of trading using opposite Vera Bradley and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vera Bradley 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.| Vera Bradley vs. Rocky Brands | Vera Bradley vs. Steven Madden | Vera Bradley vs. Caleres | Vera Bradley vs. Weyco Group |
| BCE vs. RLJ Lodging Trust | BCE vs. Aquagold International | BCE vs. Stepstone Group | BCE vs. Morningstar Unconstrained Allocation |
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 Stocks Directory module to find actively traded stocks across global markets.
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