Correlation Between Baker Steel and One Media
Can any of the company-specific risk be diversified away by investing in both Baker Steel and One Media 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 Baker Steel and One Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baker Steel Resources and One Media iP, you can compare the effects of market volatilities on Baker Steel and One Media 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 Baker Steel with a short position of One Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Steel and One Media.
Diversification Opportunities for Baker Steel and One Media
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baker and One is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Baker Steel Resources and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP and Baker Steel 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 Baker Steel Resources are associated (or correlated) with One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of Baker Steel i.e., Baker Steel and One Media go up and down completely randomly.
Pair Corralation between Baker Steel and One Media
Assuming the 90 days trading horizon Baker Steel Resources is expected to generate 1.42 times more return on investment than One Media. However, Baker Steel is 1.42 times more volatile than One Media iP. It trades about 0.03 of its potential returns per unit of risk. One Media iP is currently generating about -0.02 per unit of risk. If you would invest 4,475 in Baker Steel Resources on September 2, 2024 and sell it today you would earn a total of 1,325 from holding Baker Steel Resources or generate 29.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baker Steel Resources vs. One Media iP
Performance |
| Timeline |
| Baker Steel Resources |
| One Media iP |
Baker Steel and One Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baker Steel and One Media
The main advantage of trading using opposite Baker Steel and One Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Steel position performs unexpectedly, One Media 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 One Media will offset losses from the drop in One Media's long position.| Baker Steel vs. Toyota Motor Corp | Baker Steel vs. SoftBank Group Corp | Baker Steel vs. OTP Bank Nyrt | Baker Steel vs. Las Vegas Sands |
| One Media vs. Samsung Electronics Co | One Media vs. Samsung Electronics Co | One Media vs. Hyundai Motor | One Media vs. Toyota Motor Corp |
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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