Correlation Between Flow Capital and Billy Goat
Can any of the company-specific risk be diversified away by investing in both Flow Capital and Billy Goat 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 Flow Capital and Billy Goat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Capital Corp and Billy Goat Brands, you can compare the effects of market volatilities on Flow Capital and Billy Goat 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 Flow Capital with a short position of Billy Goat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Capital and Billy Goat.
Diversification Opportunities for Flow Capital and Billy Goat
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Flow and Billy is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Flow Capital Corp and Billy Goat Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Billy Goat Brands and Flow Capital 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 Flow Capital Corp are associated (or correlated) with Billy Goat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Billy Goat Brands has no effect on the direction of Flow Capital i.e., Flow Capital and Billy Goat go up and down completely randomly.
Pair Corralation between Flow Capital and Billy Goat
Assuming the 90 days horizon Flow Capital is expected to generate 13.75 times less return on investment than Billy Goat. But when comparing it to its historical volatility, Flow Capital Corp is 15.55 times less risky than Billy Goat. It trades about 0.07 of its potential returns per unit of risk. Billy Goat Brands is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 86.00 in Billy Goat Brands on September 2, 2024 and sell it today you would lose (73.00) from holding Billy Goat Brands or give up 84.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 59.68% |
| Values | Daily Returns |
Flow Capital Corp vs. Billy Goat Brands
Performance |
| Timeline |
| Flow Capital Corp |
| Billy Goat Brands |
Flow Capital and Billy Goat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Capital and Billy Goat
The main advantage of trading using opposite Flow Capital and Billy Goat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Capital position performs unexpectedly, Billy Goat 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 Billy Goat will offset losses from the drop in Billy Goat's long position.| Flow Capital vs. Guardian Capital Group | Flow Capital vs. Urbana | Flow Capital vs. Princeton Capital | Flow Capital vs. Blackhawk Growth Corp |
| Billy Goat vs. Blackhawk Growth Corp | Billy Goat vs. Guardian Capital Group | Billy Goat vs. Flow Capital Corp | Billy Goat vs. Princeton Capital |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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