Correlation Between Beyond Commerce and CyberAgent

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

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

Diversification Opportunities for Beyond Commerce and CyberAgent

-0.2

Correlation Coefficient

Beyond Commerce  CyberAgent

Good diversification

The 3 months correlation between Beyond and CyberAgent is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Commerce and CyberAgent ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberAgent ADR and Beyond Commerce 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 Beyond Commerce are associated (or correlated) with CyberAgent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberAgent ADR has no effect on the direction of Beyond Commerce i.e., Beyond Commerce and CyberAgent go up and down completely randomly.

Pair Corralation between Beyond Commerce and CyberAgent

Given the investment horizon of 90 days Beyond Commerce is expected to generate 21.91 times more return on investment than CyberAgent. However, Beyond Commerce is 21.91 times more volatile than CyberAgent ADR. It trades about 0.21 of its potential returns per unit of risk. CyberAgent ADR is currently generating about -0.06 per unit of risk. If you would invest  0.01  in Beyond Commerce on October 25, 2024 and sell it today you would earn a total of  0.01  from holding Beyond Commerce or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Beyond Commerce  vs.  CyberAgent ADR

Beyond Commerce

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Beyond Commerce are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Beyond Commerce exhibited solid returns over the last few months and may actually be approaching a breakup point.

CyberAgent ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CyberAgent ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Beyond Commerce and CyberAgent

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

The idea behind Beyond Commerce and CyberAgent ADR 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.