Correlation Between BII Railway and Sociedad Química

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

By analyzing existing cross correlation between BII Railway Transportation and Sociedad Qumica y, you can compare the effects of market volatilities on BII Railway and Sociedad Química 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 BII Railway with a short position of Sociedad Química. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and Sociedad Química.

Diversification Opportunities for BII Railway and Sociedad Química

0.0

Correlation Coefficient

BII Railway  Sociedad Química

Pay attention - limited upside

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

Pair Corralation between BII Railway and Sociedad Química

If you would invest  2.65  in BII Railway Transportation on October 10, 2024 and sell it today you would earn a total of  0.10  from holding BII Railway Transportation or generate 3.77% return on investment over 90 days.

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

BII Railway Transportation  vs.  Sociedad Qumica y

BII Railway Transpor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BII Railway Transportation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Sociedad Qumica y

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with BII Railway and Sociedad Química

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

The idea behind BII Railway Transportation and Sociedad Qumica y 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.