Correlation Between 225 STGALLE and 225 BNG

Can any of the company-specific risk be diversified away by investing in both 225 STGALLE and 225 BNG 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 225 STGALLE and 225 BNG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 225 STGALLE KB and 225 BNG 21, you can compare the effects of market volatilities on 225 STGALLE and 225 BNG 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 225 STGALLE with a short position of 225 BNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of 225 STGALLE and 225 BNG.

Diversification Opportunities for 225 STGALLE and 225 BNG

0.0

Correlation Coefficient

225 STGALLE  225 BNG

Pay attention - limited upside

The 3 months correlation between 225 and 225 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 225 STGALLE KB and 225 BNG 21 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 225 BNG 21 and 225 STGALLE 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 225 STGALLE KB are associated (or correlated) with 225 BNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 225 BNG 21 has no effect on the direction of 225 STGALLE i.e., 225 STGALLE and 225 BNG go up and down completely randomly.

Pair Corralation between 225 STGALLE and 225 BNG

If you would invest (100.00) in 225 BNG 21 on October 1, 2024 and sell it today you would earn a total of  100.00  from holding 225 BNG 21 or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

225 STGALLE KB  vs.  225 BNG 21

225 STGALLE KB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 225 STGALLE KB has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, 225 STGALLE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

225 BNG 21

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 225 BNG 21 has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong technical and fundamental indicators, 225 BNG is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 225 STGALLE and 225 BNG

The main advantage of trading using opposite 225 STGALLE and 225 BNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 225 STGALLE position performs unexpectedly, 225 BNG 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 225 BNG will offset losses from the drop in 225 BNG's long position.

The idea behind 225 STGALLE KB and 225 BNG 21 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.