Correlation Between British American and Neometals
Can any of the company-specific risk be diversified away by investing in both British American and Neometals 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 British American and Neometals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and Neometals, you can compare the effects of market volatilities on British American and Neometals 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 British American with a short position of Neometals. Check out your portfolio center. Please also check ongoing floating volatility patterns of British American and Neometals.
Diversification Opportunities for British American and Neometals
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between British and Neometals is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and Neometals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neometals and British American 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 British American Tobacco are associated (or correlated) with Neometals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neometals has no effect on the direction of British American i.e., British American and Neometals go up and down completely randomly.
Pair Corralation between British American and Neometals
If you would invest 3,490 in British American Tobacco on September 1, 2024 and sell it today you would earn a total of 307.00 from holding British American Tobacco or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
British American Tobacco vs. Neometals
Performance |
| Timeline |
| British American Tobacco |
| Neometals |
British American and Neometals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British American and Neometals
The main advantage of trading using opposite British American and Neometals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British American position performs unexpectedly, Neometals 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 Neometals will offset losses from the drop in Neometals' long position.| British American vs. European Metals Holdings | British American vs. X FAB Silicon Foundries | British American vs. Baker Steel Resources | British American vs. Universal Music Group |
| Neometals vs. Charter Communications Cl | Neometals vs. Zegona Communications Plc | Neometals vs. British American Tobacco | Neometals vs. Melia Hotels |
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 CEOs Directory module to screen CEOs from public companies around the world.
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