Correlation Between ADRIATIC METALS and British American
Can any of the company-specific risk be diversified away by investing in both ADRIATIC METALS and British American 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 ADRIATIC METALS and British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and British American Tobacco, you can compare the effects of market volatilities on ADRIATIC METALS and British American 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 ADRIATIC METALS with a short position of British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and British American.
Diversification Opportunities for ADRIATIC METALS and British American
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between ADRIATIC and British is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco and ADRIATIC METALS 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 ADRIATIC METALS LS 013355 are associated (or correlated) with British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of ADRIATIC METALS i.e., ADRIATIC METALS and British American go up and down completely randomly.
Pair Corralation between ADRIATIC METALS and British American
Assuming the 90 days trading horizon ADRIATIC METALS LS 013355 is expected to generate 3.01 times more return on investment than British American. However, ADRIATIC METALS is 3.01 times more volatile than British American Tobacco. It trades about 0.03 of its potential returns per unit of risk. British American Tobacco is currently generating about 0.02 per unit of risk. If you would invest 189.00 in ADRIATIC METALS LS 013355 on September 3, 2024 and sell it today you would earn a total of 57.00 from holding ADRIATIC METALS LS 013355 or generate 30.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADRIATIC METALS LS 013355 vs. British American Tobacco
Performance |
| Timeline |
| ADRIATIC METALS LS |
| British American Tobacco |
ADRIATIC METALS and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADRIATIC METALS and British American
The main advantage of trading using opposite ADRIATIC METALS and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| ADRIATIC METALS vs. MOLSON RS BEVERAGE | ADRIATIC METALS vs. China Resources Beer | ADRIATIC METALS vs. Suntory Beverage Food | ADRIATIC METALS vs. Fevertree Drinks PLC |
| British American vs. British American Tobacco | British American vs. Japan Tobacco | British American vs. JAPAN TOBACCO UNSPADR12 | British American vs. Imperial Brands PLC |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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