Correlation Between British American and Ming Le
Can any of the company-specific risk be diversified away by investing in both British American and Ming Le 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 British American and Ming Le into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and Ming Le Sports, you can compare the effects of market volatilities on British American and Ming Le 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 British American with a short position of Ming Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of British American and Ming Le.
Diversification Opportunities for British American and Ming Le
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between British and Ming is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports and British American 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 British American Tobacco are associated (or correlated) with Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of British American i.e., British American and Ming Le go up and down completely randomly.
Pair Corralation between British American and Ming Le
Assuming the 90 days trading horizon British American Tobacco is expected to generate 1.21 times more return on investment than Ming Le. However, British American is 1.21 times more volatile than Ming Le Sports. It trades about -0.04 of its potential returns per unit of risk. Ming Le Sports is currently generating about -0.21 per unit of risk. If you would invest 3,740 in British American Tobacco on November 28, 2024 and sell it today you would lose (82.00) from holding British American Tobacco or give up 2.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
British American Tobacco vs. Ming Le Sports
Performance |
| Timeline |
| British American Tobacco |
| Ming Le Sports |
British American and Ming Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British American and Ming Le
The main advantage of trading using opposite British American and Ming Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British American position performs unexpectedly, Ming Le 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 Ming Le will offset losses from the drop in Ming Le's long position.| British American vs. CVR Medical Corp | British American vs. Ebro Foods SA | British American vs. Carnegie Clean Energy | British American vs. ULTRA CLEAN HLDGS |
| Ming Le vs. Tradegate AG Wertpapierhandelsbank | Ming Le vs. H2O Retailing | Ming Le vs. Jacquet Metal Service | Ming Le vs. Canon Marketing Japan |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |