Correlation Between BCE and Alvarion

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

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

Diversification Opportunities for BCE and Alvarion

0.0

Correlation Coefficient

BCE  Alvarion

Pay attention - limited upside

The 3 months correlation between BCE and Alvarion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and Alvarion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvarion 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 Alvarion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvarion has no effect on the direction of BCE i.e., BCE and Alvarion go up and down completely randomly.

Pair Corralation between BCE and Alvarion

If you would invest  1,069  in BCE Inc on December 29, 2024 and sell it today you would earn a total of  31.00  from holding BCE Inc or generate 2.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BCE Inc  vs.  Alvarion

BCE Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BCE Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, BCE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Alvarion

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alvarion has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Alvarion 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 BCE and Alvarion

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

The idea behind BCE Inc and Alvarion 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.