Correlation Between Bureau Veritas and China Steel
Can any of the company-specific risk be diversified away by investing in both Bureau Veritas and China Steel 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 Bureau Veritas and China Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bureau Veritas SA and China Steel, you can compare the effects of market volatilities on Bureau Veritas and China Steel 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 Bureau Veritas with a short position of China Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bureau Veritas and China Steel.
Diversification Opportunities for Bureau Veritas and China Steel
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bureau and China is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bureau Veritas SA and China Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Steel and Bureau Veritas 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 Bureau Veritas SA are associated (or correlated) with China Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Steel has no effect on the direction of Bureau Veritas i.e., Bureau Veritas and China Steel go up and down completely randomly.
Pair Corralation between Bureau Veritas and China Steel
If you would invest 2,683 in Bureau Veritas SA on January 26, 2024 and sell it today you would earn a total of 307.00 from holding Bureau Veritas SA or generate 11.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Bureau Veritas SA vs. China Steel
Performance |
| Timeline |
| Bureau Veritas SA |
| China Steel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bureau Veritas and China Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bureau Veritas and China Steel
The main advantage of trading using opposite Bureau Veritas and China Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bureau Veritas position performs unexpectedly, China Steel 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 China Steel will offset losses from the drop in China Steel's long position.| Bureau Veritas vs. TransUnion | Bureau Veritas vs. Equifax | Bureau Veritas vs. Booz Allen Hamilton | Bureau Veritas vs. Verisk Analytics |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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