Correlation Between PSI 20 and Bucharest BET-NG
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By analyzing existing cross correlation between PSI 20 Stock and Bucharest BET-NG, you can compare the effects of market volatilities on PSI 20 and Bucharest BET-NG 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 PSI 20 with a short position of Bucharest BET-NG. Check out your portfolio center. Please also check ongoing floating volatility patterns of PSI 20 and Bucharest BET-NG.
Diversification Opportunities for PSI 20 and Bucharest BET-NG
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PSI and Bucharest is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding PSI 20 Stock and Bucharest BET-NG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bucharest BET-NG and PSI 20 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 PSI 20 Stock are associated (or correlated) with Bucharest BET-NG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bucharest BET-NG has no effect on the direction of PSI 20 i.e., PSI 20 and Bucharest BET-NG go up and down completely randomly.
Pair Corralation between PSI 20 and Bucharest BET-NG
Assuming the 90 days trading horizon PSI 20 Stock is expected to generate 2.66 times more return on investment than Bucharest BET-NG. However, PSI 20 is 2.66 times more volatile than Bucharest BET-NG. It trades about 0.21 of its potential returns per unit of risk. Bucharest BET-NG is currently generating about -0.04 per unit of risk. If you would invest 630,721 in PSI 20 Stock on February 1, 2024 and sell it today you would earn a total of 30,835 from holding PSI 20 Stock or generate 4.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.65% |
Values | Daily Returns |
PSI 20 Stock vs. Bucharest BET-NG
Performance |
Timeline |
PSI 20 and Bucharest BET-NG Volatility Contrast
Predicted Return Density |
Returns |
Bucharest BET-NG
Pair trading matchups for Bucharest BET-NG
Pair Trading with PSI 20 and Bucharest BET-NG
The main advantage of trading using opposite PSI 20 and Bucharest BET-NG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PSI 20 position performs unexpectedly, Bucharest BET-NG 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 Bucharest BET-NG will offset losses from the drop in Bucharest BET-NG's long position.The idea behind PSI 20 Stock and Bucharest BET-NG 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.Bucharest BET-NG vs. Patria Bank SA | Bucharest BET-NG vs. TRANSILVANIA INVESTMENTS ALLIANCE | Bucharest BET-NG vs. Erste Group Bank | Bucharest BET-NG vs. IHUNT TECHNOLOGY IMPORT EXPORT |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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