Correlation Between BRITISH AMERICAN and Revitus Property
Can any of the company-specific risk be diversified away by investing in both BRITISH AMERICAN and Revitus Property 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 Revitus Property 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 Revitus Property Opportunities, you can compare the effects of market volatilities on BRITISH AMERICAN and Revitus Property 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 Revitus Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRITISH AMERICAN and Revitus Property.
Diversification Opportunities for BRITISH AMERICAN and Revitus Property
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BRITISH and Revitus is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding BRITISH AMERICAN TOBACCO and Revitus Property Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revitus Property Opp 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 Revitus Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revitus Property Opp has no effect on the direction of BRITISH AMERICAN i.e., BRITISH AMERICAN and Revitus Property go up and down completely randomly.
Pair Corralation between BRITISH AMERICAN and Revitus Property
Assuming the 90 days trading horizon BRITISH AMERICAN TOBACCO is expected to generate 4.71 times more return on investment than Revitus Property. However, BRITISH AMERICAN is 4.71 times more volatile than Revitus Property Opportunities. It trades about 0.27 of its potential returns per unit of risk. Revitus Property Opportunities is currently generating about -0.19 per unit of risk. If you would invest 803,600 in BRITISH AMERICAN TOBACCO on October 28, 2024 and sell it today you would earn a total of 186,400 from holding BRITISH AMERICAN TOBACCO or generate 23.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRITISH AMERICAN TOBACCO vs. Revitus Property Opportunities
Performance |
| Timeline |
| BRITISH AMERICAN TOBACCO |
| Revitus Property Opp |
BRITISH AMERICAN and Revitus Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRITISH AMERICAN and Revitus Property
The main advantage of trading using opposite BRITISH AMERICAN and Revitus Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRITISH AMERICAN position performs unexpectedly, Revitus Property 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 Revitus Property will offset losses from the drop in Revitus Property's long position.| BRITISH AMERICAN vs. FIRST MUTUAL PROPERTIES | BRITISH AMERICAN vs. TANGANDA TEA PANY | BRITISH AMERICAN vs. ZB FINANCIAL HOLDINGS | BRITISH AMERICAN vs. Cass Saddle Agriculture |
| Revitus Property vs. FIRST MUTUAL PROPERTIES | Revitus Property vs. BRITISH AMERICAN TOBACCO | Revitus Property vs. TANGANDA TEA PANY | Revitus Property vs. ZB FINANCIAL HOLDINGS |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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