Correlation Between BF Utilities and ZF Commercial
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By analyzing existing cross correlation between BF Utilities Limited and ZF Commercial Vehicle, you can compare the effects of market volatilities on BF Utilities and ZF Commercial 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 Utilities with a short position of ZF Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BF Utilities and ZF Commercial.
Diversification Opportunities for BF Utilities and ZF Commercial
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between BFUTILITIE and ZFCVINDIA is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding BF Utilities Limited and ZF Commercial Vehicle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZF Commercial Vehicle and BF Utilities 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 Utilities Limited are associated (or correlated) with ZF Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZF Commercial Vehicle has no effect on the direction of BF Utilities i.e., BF Utilities and ZF Commercial go up and down completely randomly.
Pair Corralation between BF Utilities and ZF Commercial
Assuming the 90 days trading horizon BF Utilities Limited is expected to generate 1.5 times more return on investment than ZF Commercial. However, BF Utilities is 1.5 times more volatile than ZF Commercial Vehicle. It trades about 0.07 of its potential returns per unit of risk. ZF Commercial Vehicle is currently generating about 0.03 per unit of risk. If you would invest 39,540 in BF Utilities Limited on September 26, 2024 and sell it today you would earn a total of 62,290 from holding BF Utilities Limited or generate 157.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
BF Utilities Limited vs. ZF Commercial Vehicle
Performance |
Timeline |
BF Utilities Limited |
ZF Commercial Vehicle |
BF Utilities and ZF Commercial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BF Utilities and ZF Commercial
The main advantage of trading using opposite BF Utilities and ZF Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BF Utilities position performs unexpectedly, ZF Commercial 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 ZF Commercial will offset losses from the drop in ZF Commercial's long position.BF Utilities vs. Kingfa Science Technology | BF Utilities vs. Rico Auto Industries | BF Utilities vs. GACM Technologies Limited | BF Utilities vs. COSMO FIRST LIMITED |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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