Correlation Between BCPG Public and Sahacogen Public

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

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

Diversification Opportunities for BCPG Public and Sahacogen Public

0.86

Correlation Coefficient

BCPG Public  Sahacogen Public

Very poor diversification

The 3 months correlation between BCPG and Sahacogen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding BCPG Public and Sahacogen Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sahacogen Public and BCPG Public 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 BCPG Public are associated (or correlated) with Sahacogen Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sahacogen Public has no effect on the direction of BCPG Public i.e., BCPG Public and Sahacogen Public go up and down completely randomly.

Pair Corralation between BCPG Public and Sahacogen Public

Assuming the 90 days trading horizon BCPG Public is expected to generate 2.59 times more return on investment than Sahacogen Public. However, BCPG Public is 2.59 times more volatile than Sahacogen Public. It trades about 0.2 of its potential returns per unit of risk. Sahacogen Public is currently generating about -0.06 per unit of risk. If you would invest  570.00  in BCPG Public on October 10, 2024 and sell it today you would earn a total of  75.00  from holding BCPG Public or generate 13.16% return on investment over 90 days.

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

BCPG Public  vs.  Sahacogen Public

BCPG Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BCPG Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Sahacogen Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sahacogen Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with BCPG Public and Sahacogen Public

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

The idea behind BCPG Public and Sahacogen Public 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.