Correlation Between Pengana Private and BSP Financial

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

By analyzing existing cross correlation between Pengana Private Equity and BSP Financial Group, you can compare the effects of market volatilities on Pengana Private and BSP Financial 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 Pengana Private with a short position of BSP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengana Private and BSP Financial.

Diversification Opportunities for Pengana Private and BSP Financial

0.12

Correlation Coefficient

Pengana Private  BSP Financial

Average diversification

The 3 months correlation between Pengana and BSP is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Pengana Private Equity and BSP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSP Financial Group and Pengana Private 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 Pengana Private Equity are associated (or correlated) with BSP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSP Financial Group has no effect on the direction of Pengana Private i.e., Pengana Private and BSP Financial go up and down completely randomly.

Pair Corralation between Pengana Private and BSP Financial

Assuming the 90 days trading horizon Pengana Private is expected to generate 1.36 times less return on investment than BSP Financial. In addition to that, Pengana Private is 1.14 times more volatile than BSP Financial Group. It trades about 0.07 of its total potential returns per unit of risk. BSP Financial Group is currently generating about 0.11 per unit of volatility. If you would invest  635.00  in BSP Financial Group on October 6, 2024 and sell it today you would earn a total of  55.00  from holding BSP Financial Group or generate 8.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Pengana Private Equity  vs.  BSP Financial Group

Pengana Private Equity

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pengana Private Equity are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Pengana Private is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

BSP Financial Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BSP Financial Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, BSP Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Pengana Private and BSP Financial

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

The idea behind Pengana Private Equity and BSP Financial Group 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.