Correlation Between BFC Capital and CHS
Can any of the company-specific risk be diversified away by investing in both BFC Capital and CHS 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 BFC Capital and CHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BFC Capital Trust and CHS Inc CM, you can compare the effects of market volatilities on BFC Capital and CHS 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 BFC Capital with a short position of CHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BFC Capital and CHS.
Diversification Opportunities for BFC Capital and CHS
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BFC and CHS is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding BFC Capital Trust and CHS Inc CM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHS Inc CM and BFC Capital 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 BFC Capital Trust are associated (or correlated) with CHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHS Inc CM has no effect on the direction of BFC Capital i.e., BFC Capital and CHS go up and down completely randomly.
Pair Corralation between BFC Capital and CHS
Assuming the 90 days horizon BFC Capital is expected to generate 1.7 times less return on investment than CHS. In addition to that, BFC Capital is 2.02 times more volatile than CHS Inc CM. It trades about 0.1 of its total potential returns per unit of risk. CHS Inc CM is currently generating about 0.33 per unit of volatility. If you would invest 2,490 in CHS Inc CM on December 2, 2024 and sell it today you would earn a total of 68.00 from holding CHS Inc CM or generate 2.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
BFC Capital Trust vs. CHS Inc CM
Performance |
Timeline |
BFC Capital Trust |
CHS Inc CM |
BFC Capital and CHS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BFC Capital and CHS
The main advantage of trading using opposite BFC Capital and CHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BFC Capital position performs unexpectedly, CHS 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 CHS will offset losses from the drop in CHS's long position.BFC Capital vs. Popular Capital Trust | BFC Capital vs. CHS Inc CN | BFC Capital vs. Wintrust Financial Corp | BFC Capital vs. Auburn National Bancorporation |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |