Correlation Between BizLink Holding and Topkey Corp
Can any of the company-specific risk be diversified away by investing in both BizLink Holding and Topkey Corp 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 BizLink Holding and Topkey Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BizLink Holding and Topkey Corp, you can compare the effects of market volatilities on BizLink Holding and Topkey Corp 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 BizLink Holding with a short position of Topkey Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BizLink Holding and Topkey Corp.
Diversification Opportunities for BizLink Holding and Topkey Corp
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BizLink and Topkey is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding BizLink Holding and Topkey Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topkey Corp and BizLink Holding 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 BizLink Holding are associated (or correlated) with Topkey Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topkey Corp has no effect on the direction of BizLink Holding i.e., BizLink Holding and Topkey Corp go up and down completely randomly.
Pair Corralation between BizLink Holding and Topkey Corp
Assuming the 90 days trading horizon BizLink Holding is expected to generate 3.52 times more return on investment than Topkey Corp. However, BizLink Holding is 3.52 times more volatile than Topkey Corp. It trades about -0.01 of its potential returns per unit of risk. Topkey Corp is currently generating about -0.06 per unit of risk. If you would invest 63,300 in BizLink Holding on September 23, 2024 and sell it today you would lose (1,300) from holding BizLink Holding or give up 2.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BizLink Holding vs. Topkey Corp
Performance |
Timeline |
BizLink Holding |
Topkey Corp |
BizLink Holding and Topkey Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BizLink Holding and Topkey Corp
The main advantage of trading using opposite BizLink Holding and Topkey Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BizLink Holding position performs unexpectedly, Topkey Corp 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 Topkey Corp will offset losses from the drop in Topkey Corp's long position.BizLink Holding vs. Yang Ming Marine | BizLink Holding vs. Evergreen Marine Corp | BizLink Holding vs. Eva Airways Corp | BizLink Holding vs. U Ming Marine Transport |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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