Correlation Between BCE and BCE

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

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

Diversification Opportunities for BCE and BCE

0.98

Correlation Coefficient

BCE  BCE

Almost no diversification

The 3 months correlation between BCE and BCE is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc Pref 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 BCE 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 BCE Inc Pref 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 BCE i.e., BCE and BCE go up and down completely randomly.

Pair Corralation between BCE and BCE

Assuming the 90 days trading horizon BCE Inc Pref is expected to generate 0.84 times more return on investment than BCE. However, BCE Inc Pref is 1.19 times less risky than BCE. It trades about 0.64 of its potential returns per unit of risk. BCE Inc Pref is currently generating about 0.37 per unit of risk. If you would invest  1,571  in BCE Inc Pref on April 23, 2025 and sell it today you would earn a total of  389.00  from holding BCE Inc Pref or generate 24.76% return on investment over 90 days.

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

BCE Inc Pref  vs.  BCE Inc Pref

BCE Inc Pref

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in BCE Inc Pref are ranked lower than 50 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, BCE sustained solid returns over the last few months and may actually be approaching a breakup point.

BCE Inc Pref

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in BCE Inc Pref are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, BCE sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BCE and BCE

The main advantage of trading using opposite BCE and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE 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 BCE Inc Pref 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.