Correlation Between Thyssenkrupp and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both Thyssenkrupp and Batm Advanced 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 Thyssenkrupp and Batm Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thyssenkrupp AG ON and Batm Advanced Communications, you can compare the effects of market volatilities on Thyssenkrupp and Batm Advanced 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 Thyssenkrupp with a short position of Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thyssenkrupp and Batm Advanced.
Diversification Opportunities for Thyssenkrupp and Batm Advanced
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thyssenkrupp and Batm is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Thyssenkrupp AG ON and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun and Thyssenkrupp 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 Thyssenkrupp AG ON are associated (or correlated) with Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of Thyssenkrupp i.e., Thyssenkrupp and Batm Advanced go up and down completely randomly.
Pair Corralation between Thyssenkrupp and Batm Advanced
Assuming the 90 days trading horizon Thyssenkrupp AG ON is expected to under-perform the Batm Advanced. But the stock apears to be less risky and, when comparing its historical volatility, Thyssenkrupp AG ON is 1.18 times less risky than Batm Advanced. The stock trades about -0.05 of its potential returns per unit of risk. The Batm Advanced Communications is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,635 in Batm Advanced Communications on September 12, 2024 and sell it today you would lose (755.00) from holding Batm Advanced Communications or give up 28.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thyssenkrupp AG ON vs. Batm Advanced Communications
Performance |
| Timeline |
| Thyssenkrupp AG ON |
| Batm Advanced Commun |
Thyssenkrupp and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thyssenkrupp and Batm Advanced
The main advantage of trading using opposite Thyssenkrupp and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thyssenkrupp position performs unexpectedly, Batm Advanced 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 Batm Advanced will offset losses from the drop in Batm Advanced's long position.| Thyssenkrupp vs. Batm Advanced Communications | Thyssenkrupp vs. United Internet AG | Thyssenkrupp vs. Verizon Communications | Thyssenkrupp vs. PureTech Health plc |
| Batm Advanced vs. Home Depot | Batm Advanced vs. Chrysalis Investments | Batm Advanced vs. Neometals | Batm Advanced vs. Coor Service Management |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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