Correlation Between Bank Central and Financial Strategies

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

By analyzing existing cross correlation between Bank Central Asia and Financial Strategies Acquisition, you can compare the effects of market volatilities on Bank Central and Financial Strategies 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 Bank Central with a short position of Financial Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Financial Strategies.

Diversification Opportunities for Bank Central and Financial Strategies

-0.31

Correlation Coefficient

Bank Central  Financial Strategies

Very good diversification

The 3 months correlation between Bank and Financial is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Financial Strategies Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Strategies and Bank Central 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 Bank Central Asia are associated (or correlated) with Financial Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Strategies has no effect on the direction of Bank Central i.e., Bank Central and Financial Strategies go up and down completely randomly.

Pair Corralation between Bank Central and Financial Strategies

If you would invest  16.00  in Financial Strategies Acquisition on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Financial Strategies Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

Bank Central Asia  vs.  Financial Strategies Acquisiti

Bank Central Asia

Risk-Adjusted Performance

0 of 100

Very Weak

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

Financial Strategies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Financial Strategies Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Financial Strategies is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bank Central and Financial Strategies

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

The idea behind Bank Central Asia and Financial Strategies Acquisition 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 CEOs Directory module to screen CEOs from public companies around the world.