Correlation Between Bill Holdings and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both Bill Holdings and FLOW TRADERS 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 Bill Holdings and FLOW TRADERS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bill Holdings and FLOW TRADERS LTD, you can compare the effects of market volatilities on Bill Holdings and FLOW TRADERS 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 Bill Holdings with a short position of FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bill Holdings and FLOW TRADERS.
Diversification Opportunities for Bill Holdings and FLOW TRADERS
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bill and FLOW is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bill Holdings and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD and Bill Holdings 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 Bill Holdings are associated (or correlated) with FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of Bill Holdings i.e., Bill Holdings and FLOW TRADERS go up and down completely randomly.
Pair Corralation between Bill Holdings and FLOW TRADERS
Assuming the 90 days horizon Bill Holdings is expected to generate 2.45 times more return on investment than FLOW TRADERS. However, Bill Holdings is 2.45 times more volatile than FLOW TRADERS LTD. It trades about 0.28 of its potential returns per unit of risk. FLOW TRADERS LTD is currently generating about 0.22 per unit of risk. If you would invest 4,871 in Bill Holdings on September 4, 2024 and sell it today you would earn a total of 3,646 from holding Bill Holdings or generate 74.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Bill Holdings vs. FLOW TRADERS LTD
Performance |
| Timeline |
| Bill Holdings |
| FLOW TRADERS LTD |
Bill Holdings and FLOW TRADERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bill Holdings and FLOW TRADERS
The main advantage of trading using opposite Bill Holdings and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bill Holdings position performs unexpectedly, FLOW TRADERS 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 FLOW TRADERS will offset losses from the drop in FLOW TRADERS's long position.| Bill Holdings vs. FLOW TRADERS LTD | Bill Holdings vs. ARDAGH METAL PACDL 0001 | Bill Holdings vs. ADRIATIC METALS LS 013355 | Bill Holdings vs. AUTO TRADER ADR |
| FLOW TRADERS vs. The Goldman Sachs | FLOW TRADERS vs. The Goldman Sachs | FLOW TRADERS vs. Superior Plus Corp | FLOW TRADERS vs. NMI Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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