Correlation Between Lycos Energy and Bce

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

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

Diversification Opportunities for Lycos Energy and Bce

0.43

Correlation Coefficient

Lycos Energy  Bce

Very weak diversification

The 3 months correlation between Lycos and Bce is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lycos Energy 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 Lycos Energy 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 Lycos Energy 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 Lycos Energy i.e., Lycos Energy and Bce go up and down completely randomly.

Pair Corralation between Lycos Energy and Bce

Assuming the 90 days horizon Lycos Energy is expected to under-perform the Bce. In addition to that, Lycos Energy is 3.81 times more volatile than Bce Inc Pref. It trades about -0.02 of its total potential returns per unit of risk. Bce Inc Pref is currently generating about 0.0 per unit of volatility. If you would invest  1,639  in Bce Inc Pref on October 8, 2024 and sell it today you would earn a total of  2.00  from holding Bce Inc Pref or generate 0.12% return on investment over 90 days.

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

Lycos Energy  vs.  Bce Inc Pref

Lycos Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lycos Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated 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 Lycos Energy and Bce

The main advantage of trading using opposite Lycos Energy and Bce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lycos Energy 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 Lycos Energy 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.