Correlation Between BF Investment and Easy Trip

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

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

Diversification Opportunities for BF Investment and Easy Trip

0.48

Correlation Coefficient

BF Investment  Easy Trip

Very weak diversification

The 3 months correlation between BFINVEST and Easy is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding BF Investment Limited and Easy Trip Planners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easy Trip Planners and BF Investment 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 BF Investment Limited are associated (or correlated) with Easy Trip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easy Trip Planners has no effect on the direction of BF Investment i.e., BF Investment and Easy Trip go up and down completely randomly.

Pair Corralation between BF Investment and Easy Trip

Assuming the 90 days trading horizon BF Investment Limited is expected to generate 0.88 times more return on investment than Easy Trip. However, BF Investment Limited is 1.13 times less risky than Easy Trip. It trades about -0.05 of its potential returns per unit of risk. Easy Trip Planners is currently generating about -0.1 per unit of risk. If you would invest  52,205  in BF Investment Limited on April 23, 2025 and sell it today you would lose (3,415) from holding BF Investment Limited or give up 6.54% of portfolio value over 90 days.

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

BF Investment Limited  vs.  Easy Trip Planners

BF Investment Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days BF Investment Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, BF Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Easy Trip Planners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Easy Trip Planners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with BF Investment and Easy Trip

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

The idea behind BF Investment Limited and Easy Trip Planners 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.