Correlation Between BRIT AMER and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both BRIT AMER and Strategic Investments 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 Strategic Investments 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 Strategic Investments AS, you can compare the effects of market volatilities on BRIT AMER and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRIT AMER and Strategic Investments.
Diversification Opportunities for BRIT AMER and Strategic Investments
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between BRIT and Strategic is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding BRIT AMER TOBACCO and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of BRIT AMER i.e., BRIT AMER and Strategic Investments go up and down completely randomly.
Pair Corralation between BRIT AMER and Strategic Investments
Assuming the 90 days trading horizon BRIT AMER TOBACCO is expected to generate 0.41 times more return on investment than Strategic Investments. However, BRIT AMER TOBACCO is 2.42 times less risky than Strategic Investments. It trades about 0.39 of its potential returns per unit of risk. Strategic Investments AS is currently generating about 0.02 per unit of risk. If you would invest 3,219 in BRIT AMER TOBACCO on September 4, 2024 and sell it today you would earn a total of 391.00 from holding BRIT AMER TOBACCO or generate 12.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
BRIT AMER TOBACCO vs. Strategic Investments AS
Performance |
| Timeline |
| BRIT AMER TOBACCO |
| Strategic Investments |
BRIT AMER and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRIT AMER and Strategic Investments
The main advantage of trading using opposite BRIT AMER and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRIT AMER position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| BRIT AMER vs. Thai Beverage Public | BRIT AMER vs. ITALIAN WINE BRANDS | BRIT AMER vs. VIVA WINE GROUP | BRIT AMER vs. National Retail Properties |
| Strategic Investments vs. Blackstone Group | Strategic Investments vs. BlackRock | Strategic Investments vs. The Bank of | Strategic Investments vs. Ameriprise Financial |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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