Correlation Between BZDYF and United States

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

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

Diversification Opportunities for BZDYF and United States

-0.65

Correlation Coefficient

BZDYF  United States

Excellent diversification

The 3 months correlation between BZDYF and United is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding BZDYF and United States Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Copper and BZDYF 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 BZDYF are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Copper has no effect on the direction of BZDYF i.e., BZDYF and United States go up and down completely randomly.

Pair Corralation between BZDYF and United States

If you would invest  2,660  in United States Copper on October 11, 2024 and sell it today you would earn a total of  14.00  from holding United States Copper or generate 0.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

BZDYF  vs.  United States Copper

BZDYF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BZDYF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BZDYF is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

United States Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United States Copper has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, United States is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with BZDYF and United States

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

The idea behind BZDYF and United States Copper 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.