Correlation Between BKI Investment and Wt Financial

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

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

Diversification Opportunities for BKI Investment and Wt Financial

0.14

Correlation Coefficient

BKI Investment  Wt Financial

Average diversification

The 3 months correlation between BKI and WTL is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and Wt Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wt Financial Group and BKI 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 BKI Investment are associated (or correlated) with Wt Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wt Financial Group has no effect on the direction of BKI Investment i.e., BKI Investment and Wt Financial go up and down completely randomly.

Pair Corralation between BKI Investment and Wt Financial

Assuming the 90 days trading horizon BKI Investment is expected to generate 0.25 times more return on investment than Wt Financial. However, BKI Investment is 3.92 times less risky than Wt Financial. It trades about 0.13 of its potential returns per unit of risk. Wt Financial Group is currently generating about 0.01 per unit of risk. If you would invest  169.00  in BKI Investment on October 22, 2024 and sell it today you would earn a total of  3.00  from holding BKI Investment or generate 1.78% return on investment over 90 days.

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

BKI Investment  vs.  Wt Financial Group

BKI Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BKI Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, BKI Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Wt Financial Group

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Wt Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Wt Financial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BKI Investment and Wt Financial

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

The idea behind BKI Investment and Wt Financial Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.