Correlation Between Bear Profund and Consumer Services

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

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

Diversification Opportunities for Bear Profund and Consumer Services

-0.76

Correlation Coefficient

Bear Profund  Consumer Services

Pay attention - limited upside

The 3 months correlation between Bear and Consumer is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bear Profund Bear and Consumer Services Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Services and Bear Profund 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 Bear Profund Bear are associated (or correlated) with Consumer Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Services has no effect on the direction of Bear Profund i.e., Bear Profund and Consumer Services go up and down completely randomly.

Pair Corralation between Bear Profund and Consumer Services

Assuming the 90 days horizon Bear Profund Bear is expected to generate 0.47 times more return on investment than Consumer Services. However, Bear Profund Bear is 2.11 times less risky than Consumer Services. It trades about 0.17 of its potential returns per unit of risk. Consumer Services Ultrasector is currently generating about -0.07 per unit of risk. If you would invest  1,138  in Bear Profund Bear on February 3, 2024 and sell it today you would earn a total of  37.00  from holding Bear Profund Bear or generate 3.25% return on investment over 90 days.

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

Bear Profund Bear  vs.  Consumer Services Ultrasector

Bear Profund Bear

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bear Profund Bear has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Bear Profund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Consumer Services

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Consumer Services Ultrasector are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Consumer Services is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bear Profund and Consumer Services

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

The idea behind Bear Profund Bear and Consumer Services Ultrasector 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.