Correlation Between Bankers Investment and Emergent Biosolutions
Can any of the company-specific risk be diversified away by investing in both Bankers Investment and Emergent Biosolutions 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 Bankers Investment and Emergent Biosolutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankers Investment Trust and Emergent Biosolutions, you can compare the effects of market volatilities on Bankers Investment and Emergent Biosolutions 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 Bankers Investment with a short position of Emergent Biosolutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and Emergent Biosolutions.
Diversification Opportunities for Bankers Investment and Emergent Biosolutions
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bankers and Emergent is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust and Emergent Biosolutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emergent Biosolutions and Bankers Investment 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 Bankers Investment Trust are associated (or correlated) with Emergent Biosolutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emergent Biosolutions has no effect on the direction of Bankers Investment i.e., Bankers Investment and Emergent Biosolutions go up and down completely randomly.
Pair Corralation between Bankers Investment and Emergent Biosolutions
Assuming the 90 days trading horizon Bankers Investment is expected to generate 3.91 times less return on investment than Emergent Biosolutions. But when comparing it to its historical volatility, Bankers Investment Trust is 5.19 times less risky than Emergent Biosolutions. It trades about 0.4 of its potential returns per unit of risk. Emergent Biosolutions is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 804.00 in Emergent Biosolutions on October 24, 2024 and sell it today you would earn a total of 205.00 from holding Emergent Biosolutions or generate 25.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Bankers Investment Trust vs. Emergent Biosolutions
Performance |
| Timeline |
| Bankers Investment Trust |
| Emergent Biosolutions |
Bankers Investment and Emergent Biosolutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankers Investment and Emergent Biosolutions
The main advantage of trading using opposite Bankers Investment and Emergent Biosolutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment position performs unexpectedly, Emergent Biosolutions 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 Emergent Biosolutions will offset losses from the drop in Emergent Biosolutions' long position.| Bankers Investment vs. Catalyst Media Group | Bankers Investment vs. CATLIN GROUP | Bankers Investment vs. Tamburi Investment Partners | Bankers Investment vs. Magnora ASA |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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