Correlation Between AWILCO DRILLING and BRIT AMER
Can any of the company-specific risk be diversified away by investing in both AWILCO DRILLING and BRIT AMER 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 AWILCO DRILLING and BRIT AMER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AWILCO DRILLING PLC and BRIT AMER TOBACCO, you can compare the effects of market volatilities on AWILCO DRILLING and BRIT AMER 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 AWILCO DRILLING with a short position of BRIT AMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of AWILCO DRILLING and BRIT AMER.
Diversification Opportunities for AWILCO DRILLING and BRIT AMER
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AWILCO and BRIT is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding AWILCO DRILLING PLC and BRIT AMER TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRIT AMER TOBACCO and AWILCO DRILLING 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 AWILCO DRILLING PLC are associated (or correlated) with BRIT AMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRIT AMER TOBACCO has no effect on the direction of AWILCO DRILLING i.e., AWILCO DRILLING and BRIT AMER go up and down completely randomly.
Pair Corralation between AWILCO DRILLING and BRIT AMER
Assuming the 90 days trading horizon AWILCO DRILLING is expected to generate 1.1 times less return on investment than BRIT AMER. In addition to that, AWILCO DRILLING is 3.46 times more volatile than BRIT AMER TOBACCO. It trades about 0.05 of its total potential returns per unit of risk. BRIT AMER TOBACCO is currently generating about 0.17 per unit of volatility. If you would invest 2,687 in BRIT AMER TOBACCO on September 3, 2024 and sell it today you would earn a total of 904.00 from holding BRIT AMER TOBACCO or generate 33.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AWILCO DRILLING PLC vs. BRIT AMER TOBACCO
Performance |
| Timeline |
| AWILCO DRILLING PLC |
| BRIT AMER TOBACCO |
AWILCO DRILLING and BRIT AMER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AWILCO DRILLING and BRIT AMER
The main advantage of trading using opposite AWILCO DRILLING and BRIT AMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AWILCO DRILLING position performs unexpectedly, BRIT AMER 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 BRIT AMER will offset losses from the drop in BRIT AMER's long position.| AWILCO DRILLING vs. Unity Software | AWILCO DRILLING vs. Sims Metal Management | AWILCO DRILLING vs. CVS Health | AWILCO DRILLING vs. National Health Investors |
| BRIT AMER vs. FEMALE HEALTH | BRIT AMER vs. PARKEN Sport Entertainment | BRIT AMER vs. Amkor Technology | BRIT AMER vs. CVS Health |
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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