Correlation Between BRIT AMER and Power Assets
Can any of the company-specific risk be diversified away by investing in both BRIT AMER and Power Assets 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 Power Assets 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 Power Assets Holdings, you can compare the effects of market volatilities on BRIT AMER and Power Assets 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 Power Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRIT AMER and Power Assets.
Diversification Opportunities for BRIT AMER and Power Assets
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BRIT and Power is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding BRIT AMER TOBACCO and Power Assets Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Assets Holdings 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 Power Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Assets Holdings has no effect on the direction of BRIT AMER i.e., BRIT AMER and Power Assets go up and down completely randomly.
Pair Corralation between BRIT AMER and Power Assets
Assuming the 90 days trading horizon BRIT AMER is expected to generate 3.47 times less return on investment than Power Assets. But when comparing it to its historical volatility, BRIT AMER TOBACCO is 2.67 times less risky than Power Assets. It trades about 0.09 of its potential returns per unit of risk. Power Assets Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 242.00 in Power Assets Holdings on October 16, 2024 and sell it today you would earn a total of 398.00 from holding Power Assets Holdings or generate 164.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRIT AMER TOBACCO vs. Power Assets Holdings
Performance |
| Timeline |
| BRIT AMER TOBACCO |
| Power Assets Holdings |
BRIT AMER and Power Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRIT AMER and Power Assets
The main advantage of trading using opposite BRIT AMER and Power Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRIT AMER position performs unexpectedly, Power Assets 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 Power Assets will offset losses from the drop in Power Assets' long position.| BRIT AMER vs. Transport International Holdings | BRIT AMER vs. AEON METALS LTD | BRIT AMER vs. MOLSON RS BEVERAGE | BRIT AMER vs. Yuexiu Transport Infrastructure |
| Power Assets vs. Park Hotels Resorts | Power Assets vs. The Hongkong and | Power Assets vs. SYSTEMAIR AB | Power Assets vs. INTERCONT HOTELS |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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