Correlation Between B Communications and Augwind Energy
Can any of the company-specific risk be diversified away by investing in both B Communications and Augwind Energy 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 Communications and Augwind Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Communications and Augwind Energy Tech, you can compare the effects of market volatilities on B Communications and Augwind Energy 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 Communications with a short position of Augwind Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and Augwind Energy.
Diversification Opportunities for B Communications and Augwind Energy
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BCOM and Augwind is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and Augwind Energy Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Augwind Energy Tech and B Communications 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 Communications are associated (or correlated) with Augwind Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Augwind Energy Tech has no effect on the direction of B Communications i.e., B Communications and Augwind Energy go up and down completely randomly.
Pair Corralation between B Communications and Augwind Energy
Assuming the 90 days trading horizon B Communications is expected to generate 1.3 times less return on investment than Augwind Energy. But when comparing it to its historical volatility, B Communications is 1.72 times less risky than Augwind Energy. It trades about 0.33 of its potential returns per unit of risk. Augwind Energy Tech is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 49,000 in Augwind Energy Tech on September 1, 2024 and sell it today you would earn a total of 14,610 from holding Augwind Energy Tech or generate 29.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
B Communications vs. Augwind Energy Tech
Performance |
| Timeline |
| B Communications |
| Augwind Energy Tech |
B Communications and Augwind Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Communications and Augwind Energy
The main advantage of trading using opposite B Communications and Augwind Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Communications position performs unexpectedly, Augwind Energy 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 Augwind Energy will offset losses from the drop in Augwind Energy's long position.| B Communications vs. Israel China Biotechnology | B Communications vs. The Gold Bond | B Communications vs. Overseas Commerce | B Communications vs. Big Tech 50 |
| Augwind Energy vs. Hiron Trade Investments Industrial | Augwind Energy vs. Retailors | Augwind Energy vs. Mobile Max M | Augwind Energy vs. Rimon Consulting Management |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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