Correlation Between BF Investment and Nucleus Software

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

By analyzing existing cross correlation between BF Investment Limited and Nucleus Software Exports, you can compare the effects of market volatilities on BF Investment and Nucleus Software 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 BF Investment with a short position of Nucleus Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of BF Investment and Nucleus Software.

Diversification Opportunities for BF Investment and Nucleus Software

-0.72

Correlation Coefficient

BF Investment  Nucleus Software

Pay attention - limited upside

The 3 months correlation between BFINVEST and Nucleus is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BF Investment Limited and Nucleus Software Exports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nucleus Software Exports and BF Investment 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 BF Investment Limited are associated (or correlated) with Nucleus Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nucleus Software Exports has no effect on the direction of BF Investment i.e., BF Investment and Nucleus Software go up and down completely randomly.

Pair Corralation between BF Investment and Nucleus Software

Assuming the 90 days trading horizon BF Investment Limited is expected to generate 0.97 times more return on investment than Nucleus Software. However, BF Investment Limited is 1.03 times less risky than Nucleus Software. It trades about 0.05 of its potential returns per unit of risk. Nucleus Software Exports is currently generating about -0.03 per unit of risk. If you would invest  56,140  in BF Investment Limited on September 20, 2024 and sell it today you would earn a total of  17,050  from holding BF Investment Limited or generate 30.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.18%
Values	Daily Returns

BF Investment Limited  vs.  Nucleus Software Exports

BF Investment Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BF Investment Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, BF Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Nucleus Software Exports

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with BF Investment and Nucleus Software

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

The idea behind BF Investment Limited and Nucleus Software Exports 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.