Correlation Between Western Union and BGC
Can any of the company-specific risk be diversified away by investing in both Western Union and BGC 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 Western Union and BGC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and BGC Group, you can compare the effects of market volatilities on Western Union and BGC 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 Western Union with a short position of BGC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and BGC.
Diversification Opportunities for Western Union and BGC
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and BGC is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and BGC Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGC Group and Western Union 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 Western Union Co are associated (or correlated) with BGC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGC Group has no effect on the direction of Western Union i.e., Western Union and BGC go up and down completely randomly.
Pair Corralation between Western Union and BGC
Allowing for the 90-day total investment horizon Western Union Co is expected to under-perform the BGC. But the stock apears to be less risky and, when comparing its historical volatility, Western Union Co is 1.65 times less risky than BGC. The stock trades about -0.36 of its potential returns per unit of risk. The BGC Group is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 854.00 in BGC Group on January 7, 2025 and sell it today you would lose (104.00) from holding BGC Group or give up 12.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Union Co vs. BGC Group
Performance |
| Timeline |
| Western Union |
| BGC Group |
Western Union and BGC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and BGC
The main advantage of trading using opposite Western Union and BGC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, BGC 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 BGC will offset losses from the drop in BGC's long position.| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
| BGC vs. Akso Health Group | BGC vs. Western Union Co | BGC vs. Discover Financial Services | BGC vs. Siriuspoint |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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