Correlation Between Bt Brands and Trump Media
Can any of the company-specific risk be diversified away by investing in both Bt Brands and Trump 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 Bt Brands and Trump Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bt Brands and Trump Media Technology, you can compare the effects of market volatilities on Bt Brands and Trump 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 Bt Brands with a short position of Trump Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bt Brands and Trump Media.
Diversification Opportunities for Bt Brands and Trump Media
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between BTBD and Trump is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bt Brands and Trump Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trump Media Technology 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 Trump Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trump Media Technology has no effect on the direction of Bt Brands i.e., Bt Brands and Trump Media go up and down completely randomly.
Pair Corralation between Bt Brands and Trump Media
Given the investment horizon of 90 days Bt Brands is expected to generate 3.08 times less return on investment than Trump Media. But when comparing it to its historical volatility, Bt Brands is 1.38 times less risky than Trump Media. It trades about 0.02 of its potential returns per unit of risk. Trump Media Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,604 in Trump Media Technology on August 27, 2024 and sell it today you would earn a total of 1,471 from holding Trump Media Technology or generate 91.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bt Brands vs. Trump Media Technology
Performance |
| Timeline |
| Bt Brands |
| Trump Media Technology |
Bt Brands and Trump Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bt Brands and Trump Media
The main advantage of trading using opposite Bt Brands and Trump Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bt Brands position performs unexpectedly, Trump 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 Trump Media will offset losses from the drop in Trump Media'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 |
| Trump Media vs. Texas Roadhouse | Trump Media vs. Weibo Corp | Trump Media vs. The Wendys Co | Trump Media vs. Bt Brands |
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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