Correlation Between Bt Brands and Ballys Corp
Can any of the company-specific risk be diversified away by investing in both Bt Brands and Ballys Corp 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 Bt Brands and Ballys Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bt Brands and Ballys Corp, you can compare the effects of market volatilities on Bt Brands and Ballys Corp 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 Bt Brands with a short position of Ballys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bt Brands and Ballys Corp.
Diversification Opportunities for Bt Brands and Ballys Corp
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BTBD and Ballys is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bt Brands and Ballys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballys Corp and Bt Brands 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 Bt Brands are associated (or correlated) with Ballys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballys Corp has no effect on the direction of Bt Brands i.e., Bt Brands and Ballys Corp go up and down completely randomly.
Pair Corralation between Bt Brands and Ballys Corp
Given the investment horizon of 90 days Bt Brands is expected to generate 24.78 times more return on investment than Ballys Corp. However, Bt Brands is 24.78 times more volatile than Ballys Corp. It trades about 0.08 of its potential returns per unit of risk. Ballys Corp is currently generating about 0.21 per unit of risk. If you would invest 163.00 in Bt Brands on October 12, 2024 and sell it today you would earn a total of 11.00 from holding Bt Brands or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bt Brands vs. Ballys Corp
Performance |
| Timeline |
| Bt Brands |
| Ballys Corp |
Bt Brands and Ballys Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bt Brands and Ballys Corp
The main advantage of trading using opposite Bt Brands and Ballys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bt Brands position performs unexpectedly, Ballys Corp 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 Ballys Corp will offset losses from the drop in Ballys Corp's long position.| Bt Brands vs. Alsea SAB de | Bt Brands vs. Marstons PLC | Bt Brands vs. Bagger Daves Burger | Bt Brands vs. Marstons PLC |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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