Correlation Between Bd Multimedia and Weaccess Group

Can any of the company-specific risk be diversified away by investing in both Bd Multimedia and Weaccess 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 Bd Multimedia and Weaccess Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bd Multimedia and Weaccess Group SA, you can compare the effects of market volatilities on Bd Multimedia and Weaccess 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 Bd Multimedia with a short position of Weaccess Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bd Multimedia and Weaccess Group.

Diversification Opportunities for Bd Multimedia and Weaccess Group

-0.11

Correlation Coefficient

Bd Multimedia  Weaccess Group

Good diversification

The 3 months correlation between ALBDM and Weaccess is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bd Multimedia and Weaccess Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weaccess Group SA and Bd Multimedia 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 Bd Multimedia are associated (or correlated) with Weaccess Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weaccess Group SA has no effect on the direction of Bd Multimedia i.e., Bd Multimedia and Weaccess Group go up and down completely randomly.

Pair Corralation between Bd Multimedia and Weaccess Group

Assuming the 90 days trading horizon Bd Multimedia is expected to generate 3.01 times more return on investment than Weaccess Group. However, Bd Multimedia is 3.01 times more volatile than Weaccess Group SA. It trades about 0.05 of its potential returns per unit of risk. Weaccess Group SA is currently generating about 0.15 per unit of risk. If you would invest  82.00  in Bd Multimedia on December 29, 2024 and sell it today you would earn a total of  3.00  from holding Bd Multimedia or generate 3.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bd Multimedia  vs.  Weaccess Group SA

Bd Multimedia

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bd Multimedia are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bd Multimedia reported solid returns over the last few months and may actually be approaching a breakup point.

Weaccess Group SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Weaccess Group SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Weaccess Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bd Multimedia and Weaccess Group

The main advantage of trading using opposite Bd Multimedia and Weaccess Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bd Multimedia position performs unexpectedly, Weaccess 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 Weaccess Group will offset losses from the drop in Weaccess Group's long position.

The idea behind Bd Multimedia and Weaccess Group SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.