Correlation Between BRIT AMER and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both BRIT AMER and WIMFARM SA 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 WIMFARM SA 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 WIMFARM SA EO, you can compare the effects of market volatilities on BRIT AMER and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRIT AMER and WIMFARM SA.
Diversification Opportunities for BRIT AMER and WIMFARM SA
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BRIT and WIMFARM is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding BRIT AMER TOBACCO and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of BRIT AMER i.e., BRIT AMER and WIMFARM SA go up and down completely randomly.
Pair Corralation between BRIT AMER and WIMFARM SA
Assuming the 90 days trading horizon BRIT AMER TOBACCO is expected to generate 0.32 times more return on investment than WIMFARM SA. However, BRIT AMER TOBACCO is 3.13 times less risky than WIMFARM SA. It trades about 0.03 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.07 per unit of risk. If you would invest 3,074 in BRIT AMER TOBACCO on September 19, 2024 and sell it today you would earn a total of 495.00 from holding BRIT AMER TOBACCO or generate 16.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRIT AMER TOBACCO vs. WIMFARM SA EO
Performance |
| Timeline |
| BRIT AMER TOBACCO |
| WIMFARM SA EO |
BRIT AMER and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRIT AMER and WIMFARM SA
The main advantage of trading using opposite BRIT AMER and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRIT AMER position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| BRIT AMER vs. SEI INVESTMENTS | BRIT AMER vs. ALTAIR RES INC | BRIT AMER vs. MYFAIR GOLD P | BRIT AMER vs. SOGECLAIR SA INH |
| WIMFARM SA vs. AB Volvo | WIMFARM SA vs. Daimler Truck Holding | WIMFARM SA vs. Superior Plus Corp | WIMFARM SA vs. SIVERS SEMICONDUCTORS AB |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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