Correlation Between Galexxy Holdings and BC Bud

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

By analyzing existing cross correlation between Galexxy Holdings and The BC Bud, you can compare the effects of market volatilities on Galexxy Holdings and BC Bud 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 Galexxy Holdings with a short position of BC Bud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galexxy Holdings and BC Bud.

Diversification Opportunities for Galexxy Holdings and BC Bud

-0.56

Correlation Coefficient

Galexxy Holdings  BC Bud

Excellent diversification

The 3 months correlation between Galexxy and BCBCF is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Galexxy Holdings and The BC Bud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC Bud and Galexxy Holdings 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 Galexxy Holdings are associated (or correlated) with BC Bud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC Bud has no effect on the direction of Galexxy Holdings i.e., Galexxy Holdings and BC Bud go up and down completely randomly.

Pair Corralation between Galexxy Holdings and BC Bud

Given the investment horizon of 90 days Galexxy Holdings is expected to under-perform the BC Bud. But the pink sheet apears to be less risky and, when comparing its historical volatility, Galexxy Holdings is 5.93 times less risky than BC Bud. The pink sheet trades about -0.14 of its potential returns per unit of risk. The The BC Bud is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.88  in The BC Bud on September 4, 2024 and sell it today you would earn a total of  3.67  from holding The BC Bud or generate 417.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Galexxy Holdings  vs.  The BC Bud

Galexxy Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galexxy Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

BC Bud

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The BC Bud are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, BC Bud reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Galexxy Holdings and BC Bud

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

The idea behind Galexxy Holdings and The BC Bud 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.