Correlation Between British American and Duopharma Biotech
Can any of the company-specific risk be diversified away by investing in both British American and Duopharma Biotech 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 Duopharma Biotech 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 Duopharma Biotech Bhd, you can compare the effects of market volatilities on British American and Duopharma Biotech 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 Duopharma Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of British American and Duopharma Biotech.
Diversification Opportunities for British American and Duopharma Biotech
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between British and Duopharma is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and Duopharma Biotech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duopharma Biotech Bhd 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 Duopharma Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duopharma Biotech Bhd has no effect on the direction of British American i.e., British American and Duopharma Biotech go up and down completely randomly.
Pair Corralation between British American and Duopharma Biotech
Assuming the 90 days trading horizon British American Tobacco is expected to generate 1.64 times more return on investment than Duopharma Biotech. However, British American is 1.64 times more volatile than Duopharma Biotech Bhd. It trades about 0.02 of its potential returns per unit of risk. Duopharma Biotech Bhd is currently generating about -0.19 per unit of risk. If you would invest 761.00 in British American Tobacco on September 3, 2024 and sell it today you would earn a total of 8.00 from holding British American Tobacco or generate 1.05% 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. Duopharma Biotech Bhd
Performance |
| Timeline |
| British American Tobacco |
| Duopharma Biotech Bhd |
British American and Duopharma Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British American and Duopharma Biotech
The main advantage of trading using opposite British American and Duopharma Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British American position performs unexpectedly, Duopharma Biotech 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 Duopharma Biotech will offset losses from the drop in Duopharma Biotech's long position.| British American vs. Hong Leong Bank | British American vs. Alliance Financial Group | British American vs. Senheng New Retail | British American vs. Cosmos Technology International |
| Duopharma Biotech vs. Apex Healthcare Bhd | Duopharma Biotech vs. Minetech Resources Bhd | Duopharma Biotech vs. Swift Haulage Bhd | Duopharma Biotech vs. Insas Bhd |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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