Correlation Between Cincinnati Bell and BCE

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

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

Diversification Opportunities for Cincinnati Bell and BCE

0.0

Correlation Coefficient

Cincinnati Bell  BCE

Pay attention - limited upside

The 3 months correlation between Cincinnati and BCE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cincinnati Bell and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc and Cincinnati Bell 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 Cincinnati Bell 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 Cincinnati Bell i.e., Cincinnati Bell and BCE go up and down completely randomly.

Pair Corralation between Cincinnati Bell and BCE

If you would invest (100.00) in Cincinnati Bell on January 25, 2024 and sell it today you would earn a total of  100.00  from holding Cincinnati Bell or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cincinnati Bell  vs.  BCE Inc

Cincinnati Bell

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cincinnati Bell has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Cincinnati Bell is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

BCE Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BCE Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Cincinnati Bell and BCE

The main advantage of trading using opposite Cincinnati Bell and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cincinnati Bell 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 Cincinnati Bell 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.