Correlation Between Prestige Wealth and BCE

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

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

Diversification Opportunities for Prestige Wealth and BCE

-0.35

Correlation Coefficient

Prestige Wealth  BCE

Very good diversification

The 3 months correlation between Prestige and BCE is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Prestige Wealth Ordinary and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc and Prestige Wealth 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 Prestige Wealth Ordinary 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 has no effect on the direction of Prestige Wealth i.e., Prestige Wealth and BCE go up and down completely randomly.

Pair Corralation between Prestige Wealth and BCE

Considering the 90-day investment horizon Prestige Wealth Ordinary is expected to under-perform the BCE. In addition to that, Prestige Wealth is 6.77 times more volatile than BCE Inc. It trades about -0.05 of its total potential returns per unit of risk. BCE Inc is currently generating about 0.04 per unit of volatility. If you would invest  2,219  in BCE Inc on December 21, 2024 and sell it today you would earn a total of  83.00  from holding BCE Inc or generate 3.74% return on investment over 90 days.

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

Prestige Wealth Ordinary  vs.  BCE Inc

Prestige Wealth Ordinary

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prestige Wealth Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

BCE Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BCE Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, BCE is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Prestige Wealth and BCE

The main advantage of trading using opposite Prestige Wealth and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prestige Wealth 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 Prestige Wealth Ordinary and BCE Inc 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.