Correlation Between Bce and Bird Construction

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

By analyzing existing cross correlation between Bce Inc Pref and Bird Construction, you can compare the effects of market volatilities on Bce and Bird Construction 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 Bce with a short position of Bird Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bce and Bird Construction.

Diversification Opportunities for Bce and Bird Construction

0.01

Correlation Coefficient

Bce  Bird Construction

Significant diversification

The 3 months correlation between Bce and Bird is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bce Inc Pref and Bird Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bird Construction and Bce 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 Bce Inc Pref are associated (or correlated) with Bird Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bird Construction has no effect on the direction of Bce i.e., Bce and Bird Construction go up and down completely randomly.

Pair Corralation between Bce and Bird Construction

Assuming the 90 days trading horizon Bce Inc Pref is expected to generate 0.32 times more return on investment than Bird Construction. However, Bce Inc Pref is 3.11 times less risky than Bird Construction. It trades about 0.22 of its potential returns per unit of risk. Bird Construction is currently generating about -0.23 per unit of risk. If you would invest  1,597  in Bce Inc Pref on October 6, 2024 and sell it today you would earn a total of  49.00  from holding Bce Inc Pref or generate 3.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Bce Inc Pref  vs.  Bird Construction

Bce Inc Pref

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bce Inc Pref has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Bce is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Bird Construction

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bird Construction are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bird Construction may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bce and Bird Construction

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

The idea behind Bce Inc Pref and Bird Construction 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.