Correlation Between BRIT AMER and ALLFUNDS GROUP
Can any of the company-specific risk be diversified away by investing in both BRIT AMER and ALLFUNDS GROUP 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 BRIT AMER and ALLFUNDS GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRIT AMER TOBACCO and ALLFUNDS GROUP EO 0025, you can compare the effects of market volatilities on BRIT AMER and ALLFUNDS GROUP 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 BRIT AMER with a short position of ALLFUNDS GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRIT AMER and ALLFUNDS GROUP.
Diversification Opportunities for BRIT AMER and ALLFUNDS GROUP
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between BRIT and ALLFUNDS is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding BRIT AMER TOBACCO and ALLFUNDS GROUP EO 0025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLFUNDS GROUP EO and BRIT AMER 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 BRIT AMER TOBACCO are associated (or correlated) with ALLFUNDS GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLFUNDS GROUP EO has no effect on the direction of BRIT AMER i.e., BRIT AMER and ALLFUNDS GROUP go up and down completely randomly.
Pair Corralation between BRIT AMER and ALLFUNDS GROUP
Assuming the 90 days trading horizon BRIT AMER TOBACCO is expected to generate 0.5 times more return on investment than ALLFUNDS GROUP. However, BRIT AMER TOBACCO is 2.01 times less risky than ALLFUNDS GROUP. It trades about 0.03 of its potential returns per unit of risk. ALLFUNDS GROUP EO 0025 is currently generating about -0.02 per unit of risk. If you would invest 3,094 in BRIT AMER TOBACCO on October 11, 2024 and sell it today you would earn a total of 482.00 from holding BRIT AMER TOBACCO or generate 15.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRIT AMER TOBACCO vs. ALLFUNDS GROUP EO 0025
Performance |
| Timeline |
| BRIT AMER TOBACCO |
| ALLFUNDS GROUP EO |
BRIT AMER and ALLFUNDS GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRIT AMER and ALLFUNDS GROUP
The main advantage of trading using opposite BRIT AMER and ALLFUNDS GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRIT AMER position performs unexpectedly, ALLFUNDS GROUP 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 ALLFUNDS GROUP will offset losses from the drop in ALLFUNDS GROUP's long position.| BRIT AMER vs. TAL Education Group | BRIT AMER vs. CHINA EDUCATION GROUP | BRIT AMER vs. BII Railway Transportation | BRIT AMER vs. DEVRY EDUCATION GRP |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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