Correlation Between ATS P and BCE

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

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

Diversification Opportunities for ATS P and BCE

-0.58

Correlation Coefficient

ATS P  BCE

Excellent diversification

The 3 months correlation between ATS and BCE is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ATS P and BCE Inc Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc Pref and ATS P 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 ATS P 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 Pref has no effect on the direction of ATS P i.e., ATS P and BCE go up and down completely randomly.

Pair Corralation between ATS P and BCE

Assuming the 90 days trading horizon ATS P is expected to under-perform the BCE. In addition to that, ATS P is 3.03 times more volatile than BCE Inc Pref. It trades about -0.03 of its total potential returns per unit of risk. BCE Inc Pref is currently generating about 0.03 per unit of volatility. If you would invest  1,709  in BCE Inc Pref on March 2, 2024 and sell it today you would earn a total of  7.00  from holding BCE Inc Pref or generate 0.41% return on investment over 90 days.

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

ATS P  vs.  BCE Inc Pref

ATS P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATS P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in July 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

BCE Inc Pref

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BCE Inc Pref are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BCE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ATS P and BCE

The main advantage of trading using opposite ATS P and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATS P 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 ATS P and BCE Inc Pref 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.