Correlation Between B 52 and Ditto Public
Can any of the company-specific risk be diversified away by investing in both B 52 and Ditto Public 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 B 52 and Ditto Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B 52 Capital Public and Ditto Public, you can compare the effects of market volatilities on B 52 and Ditto Public 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 B 52 with a short position of Ditto Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of B 52 and Ditto Public.
Diversification Opportunities for B 52 and Ditto Public
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between B52 and Ditto is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding B 52 Capital Public and Ditto Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ditto Public and B 52 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 B 52 Capital Public are associated (or correlated) with Ditto Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ditto Public has no effect on the direction of B 52 i.e., B 52 and Ditto Public go up and down completely randomly.
Pair Corralation between B 52 and Ditto Public
Assuming the 90 days trading horizon B 52 Capital Public is expected to under-perform the Ditto Public. In addition to that, B 52 is 2.09 times more volatile than Ditto Public. It trades about -0.03 of its total potential returns per unit of risk. Ditto Public is currently generating about -0.05 per unit of volatility. If you would invest 3,462 in Ditto Public on August 31, 2024 and sell it today you would lose (1,842) from holding Ditto Public or give up 53.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
B 52 Capital Public vs. Ditto Public
Performance |
| Timeline |
| B 52 Capital |
| Ditto Public |
B 52 and Ditto Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B 52 and Ditto Public
The main advantage of trading using opposite B 52 and Ditto Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B 52 position performs unexpectedly, Ditto Public 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 Ditto Public will offset losses from the drop in Ditto Public's long position.The idea behind B 52 Capital Public and Ditto Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ditto Public vs. Dohome Public | Ditto Public vs. Beryl 8 Plus | Ditto Public vs. Forth Public | Ditto Public vs. Delta Electronics Public |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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