Correlation Between Bayer AG and SBA Communications
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By analyzing existing cross correlation between Bayer AG NA and SBA Communications Corp, you can compare the effects of market volatilities on Bayer AG and SBA Communications 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 Bayer AG with a short position of SBA Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayer AG and SBA Communications.
Diversification Opportunities for Bayer AG and SBA Communications
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bayer and SBA is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bayer AG NA and SBA Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBA Communications Corp and Bayer AG 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 Bayer AG NA are associated (or correlated) with SBA Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBA Communications Corp has no effect on the direction of Bayer AG i.e., Bayer AG and SBA Communications go up and down completely randomly.
Pair Corralation between Bayer AG and SBA Communications
Assuming the 90 days trading horizon Bayer AG NA is expected to under-perform the SBA Communications. In addition to that, Bayer AG is 1.36 times more volatile than SBA Communications Corp. It trades about -0.12 of its total potential returns per unit of risk. SBA Communications Corp is currently generating about 0.09 per unit of volatility. If you would invest 18,063 in SBA Communications Corp on September 3, 2024 and sell it today you would earn a total of 3,517 from holding SBA Communications Corp or generate 19.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayer AG NA vs. SBA Communications Corp
Performance |
| Timeline |
| Bayer AG NA |
| SBA Communications Corp |
Bayer AG and SBA Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayer AG and SBA Communications
The main advantage of trading using opposite Bayer AG and SBA Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayer AG position performs unexpectedly, SBA Communications 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 SBA Communications will offset losses from the drop in SBA Communications' long position.The idea behind Bayer AG NA and SBA Communications Corp 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.| SBA Communications vs. Luckin Coffee | SBA Communications vs. REVO INSURANCE SPA | SBA Communications vs. Selective Insurance Group | SBA Communications vs. Goosehead Insurance |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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