Correlation Between China Gold and Bce

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

By analyzing existing cross correlation between China Gold International and Bce Inc Pref, you can compare the effects of market volatilities on China Gold and Bce 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 China Gold with a short position of Bce. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Gold and Bce.

Diversification Opportunities for China Gold and Bce

0.0

Correlation Coefficient

China Gold  Bce

Pay attention - limited upside

The 3 months correlation between China and Bce is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Gold International and Bce Inc Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bce Inc Pref and China Gold 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 China Gold International are associated (or correlated) with Bce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bce Inc Pref has no effect on the direction of China Gold i.e., China Gold and Bce go up and down completely randomly.

Pair Corralation between China Gold and Bce

If you would invest (100.00) in China Gold International on October 1, 2024 and sell it today you would earn a total of  100.00  from holding China Gold International or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

China Gold International  vs.  Bce Inc Pref

China Gold International

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days China Gold International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, China Gold is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Bce Inc Pref

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bce Inc Pref has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Bce is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with China Gold and Bce

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

The idea behind China Gold International and Bce Inc Pref 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.