Correlation Between 1933 Industries and BC Bud

Can any of the company-specific risk be diversified away by investing in both 1933 Industries 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 1933 Industries and BC Bud into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1933 Industries and The BC Bud, you can compare the effects of market volatilities on 1933 Industries 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 1933 Industries with a short position of BC Bud. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1933 Industries and BC Bud.

Diversification Opportunities for 1933 Industries and BC Bud

-0.12

Correlation Coefficient

1933 Industries  BC Bud

Good diversification

The 3 months correlation between 1933 and BCBCF is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding 1933 Industries and The BC Bud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC Bud and 1933 Industries 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 1933 Industries 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 1933 Industries i.e., 1933 Industries and BC Bud go up and down completely randomly.

Pair Corralation between 1933 Industries and BC Bud

Assuming the 90 days horizon 1933 Industries is expected to generate 3.0 times more return on investment than BC Bud. However, 1933 Industries is 3.0 times more volatile than The BC Bud. It trades about 0.13 of its potential returns per unit of risk. The BC Bud is currently generating about -0.1 per unit of risk. If you would invest  0.44  in 1933 Industries on December 25, 2024 and sell it today you would earn a total of  0.04  from holding 1933 Industries or generate 9.09% return on investment over 90 days.

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

1933 Industries  vs.  The BC Bud

1933 Industries

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 1933 Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, 1933 Industries reported solid returns over the last few months and may actually be approaching a breakup point.

BC Bud

Risk-Adjusted Performance

Very Weak

Over the last 90 days The BC Bud has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with 1933 Industries and BC Bud

The main advantage of trading using opposite 1933 Industries and BC Bud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1933 Industries 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 1933 Industries 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.