Correlation Between BCE and Integral

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

By analyzing existing cross correlation between BCE Inc and Integral Ad Science, you can compare the effects of market volatilities on BCE and Integral 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 Integral. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and Integral.

Diversification Opportunities for BCE and Integral

-0.3

Correlation Coefficient

BCE  Integral

Very good diversification

The 3 months correlation between BCE and Integral is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 are associated (or correlated) with Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of BCE i.e., BCE and Integral go up and down completely randomly.

Pair Corralation between BCE and Integral

Considering the 90-day investment horizon BCE Inc is expected to generate 0.75 times more return on investment than Integral. However, BCE Inc is 1.34 times less risky than Integral. It trades about 0.03 of its potential returns per unit of risk. Integral Ad Science is currently generating about -0.12 per unit of risk. If you would invest  2,201  in BCE Inc on December 27, 2024 and sell it today you would earn a total of  52.00  from holding BCE Inc or generate 2.36% return on investment over 90 days.

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

BCE Inc  vs.  Integral Ad Science

BCE Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BCE Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, BCE is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Integral Ad Science

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BCE and Integral

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

The idea behind BCE Inc and Integral Ad Science 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.