Correlation Between Bandwidth and Surgepays

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

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

Diversification Opportunities for Bandwidth and Surgepays

-0.44

Correlation Coefficient

Bandwidth  Surgepays

Very good diversification

The 3 months correlation between Bandwidth and Surgepays is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bandwidth and Surgepays in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surgepays and Bandwidth 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 Bandwidth are associated (or correlated) with Surgepays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surgepays has no effect on the direction of Bandwidth i.e., Bandwidth and Surgepays go up and down completely randomly.

Pair Corralation between Bandwidth and Surgepays

Given the investment horizon of 90 days Bandwidth is expected to generate 0.95 times more return on investment than Surgepays. However, Bandwidth is 1.05 times less risky than Surgepays. It trades about 0.07 of its potential returns per unit of risk. Surgepays is currently generating about -0.01 per unit of risk. If you would invest  1,179  in Bandwidth on February 21, 2024 and sell it today you would earn a total of  1,015  from holding Bandwidth or generate 86.09% return on investment over 90 days.

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

Bandwidth  vs.  Surgepays

Bandwidth

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bandwidth are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Bandwidth exhibited solid returns over the last few months and may actually be approaching a breakup point.

Surgepays

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Surgepays has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Bandwidth and Surgepays

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

The idea behind Bandwidth and Surgepays 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.