Correlation Between Textron and BIP Bermuda

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

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

Diversification Opportunities for Textron and BIP Bermuda

0.0

Correlation Coefficient

Textron  BIP Bermuda

Pay attention - limited upside

The 3 months correlation between Textron and BIP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Textron and BIP Bermuda Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIP Bermuda Holdings and Textron 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 Textron are associated (or correlated) with BIP Bermuda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIP Bermuda Holdings has no effect on the direction of Textron i.e., Textron and BIP Bermuda go up and down completely randomly.

Pair Corralation between Textron and BIP Bermuda

If you would invest  8,136  in Textron on August 26, 2025 and sell it today you would earn a total of  103.00  from holding Textron or generate 1.27% return on investment over 90 days.

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

Textron  vs.  BIP Bermuda Holdings

Textron

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Textron are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Textron is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

BIP Bermuda Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days BIP Bermuda Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, BIP Bermuda is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Textron and BIP Bermuda

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

The idea behind Textron and BIP Bermuda Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.