Correlation Between BRITISH AMERICAN and SEED
Can any of the company-specific risk be diversified away by investing in both BRITISH AMERICAN and SEED 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 SEED 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 SEED LIMITED, you can compare the effects of market volatilities on BRITISH AMERICAN and SEED 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 SEED. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRITISH AMERICAN and SEED.
Diversification Opportunities for BRITISH AMERICAN and SEED
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BRITISH and SEED is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BRITISH AMERICAN TOBACCO and SEED LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEED LIMITED 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 SEED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEED LIMITED has no effect on the direction of BRITISH AMERICAN i.e., BRITISH AMERICAN and SEED go up and down completely randomly.
Pair Corralation between BRITISH AMERICAN and SEED
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 | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
BRITISH AMERICAN TOBACCO vs. SEED LIMITED
Performance |
| Timeline |
| BRITISH AMERICAN TOBACCO |
| SEED LIMITED |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BRITISH AMERICAN and SEED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRITISH AMERICAN and SEED
The main advantage of trading using opposite BRITISH AMERICAN and SEED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRITISH AMERICAN position performs unexpectedly, SEED 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 SEED will offset losses from the drop in SEED's long position.| BRITISH AMERICAN vs. STAR AFRICA PORATION | BRITISH AMERICAN vs. CAFCA LIMITED | BRITISH AMERICAN vs. FIRST MUTUAL PROPERTIES | BRITISH AMERICAN vs. AFRICAN DISTILLERS LIMITED |
| SEED vs. STAR AFRICA PORATION | SEED vs. CAFCA LIMITED | SEED vs. FIRST MUTUAL PROPERTIES | SEED vs. AFRICAN DISTILLERS LIMITED |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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