Correlation Between Badger Infrastructure and Concrete Pumping

Can any of the company-specific risk be diversified away by investing in both Badger Infrastructure and Concrete Pumping 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 Badger Infrastructure and Concrete Pumping into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Badger Infrastructure Solutions and Concrete Pumping Holdings, you can compare the effects of market volatilities on Badger Infrastructure and Concrete Pumping 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 Badger Infrastructure with a short position of Concrete Pumping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Badger Infrastructure and Concrete Pumping.

Diversification Opportunities for Badger Infrastructure and Concrete Pumping

-0.19

Correlation Coefficient

Badger Infrastructure  Concrete Pumping

Good diversification

The 3 months correlation between Badger and Concrete is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Badger Infrastructure Solution and Concrete Pumping Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concrete Pumping Holdings and Badger Infrastructure 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 Badger Infrastructure Solutions are associated (or correlated) with Concrete Pumping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concrete Pumping Holdings has no effect on the direction of Badger Infrastructure i.e., Badger Infrastructure and Concrete Pumping go up and down completely randomly.

Pair Corralation between Badger Infrastructure and Concrete Pumping

Assuming the 90 days horizon Badger Infrastructure Solutions is expected to generate 0.46 times more return on investment than Concrete Pumping. However, Badger Infrastructure Solutions is 2.2 times less risky than Concrete Pumping. It trades about 0.13 of its potential returns per unit of risk. Concrete Pumping Holdings is currently generating about -0.02 per unit of risk. If you would invest  2,469  in Badger Infrastructure Solutions on December 27, 2024 and sell it today you would earn a total of  338.00  from holding Badger Infrastructure Solutions or generate 13.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

Badger Infrastructure Solution  vs.  Concrete Pumping Holdings

Badger Infrastructure

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Badger Infrastructure Solutions are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Badger Infrastructure reported solid returns over the last few months and may actually be approaching a breakup point.

Concrete Pumping Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Concrete Pumping Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Concrete Pumping is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Badger Infrastructure and Concrete Pumping

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

The idea behind Badger Infrastructure Solutions and Concrete Pumping Holdings 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.