Correlation Between Bt Brands and EvoAir Holdings
Can any of the company-specific risk be diversified away by investing in both Bt Brands and EvoAir Holdings 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 EvoAir Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bt Brands and EvoAir Holdings, you can compare the effects of market volatilities on Bt Brands and EvoAir Holdings 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 EvoAir Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bt Brands and EvoAir Holdings.
Diversification Opportunities for Bt Brands and EvoAir Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BTBD and EvoAir is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bt Brands and EvoAir Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EvoAir Holdings 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 EvoAir Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EvoAir Holdings has no effect on the direction of Bt Brands i.e., Bt Brands and EvoAir Holdings go up and down completely randomly.
Pair Corralation between Bt Brands and EvoAir Holdings
Given the investment horizon of 90 days Bt Brands is expected to generate 17.81 times more return on investment than EvoAir Holdings. However, Bt Brands is 17.81 times more volatile than EvoAir Holdings. It trades about 0.02 of its potential returns per unit of risk. EvoAir Holdings is currently generating about 0.06 per unit of risk. If you would invest 205.00 in Bt Brands on November 3, 2024 and sell it today you would lose (19.50) from holding Bt Brands or give up 9.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Bt Brands vs. EvoAir Holdings
Performance |
| Timeline |
| Bt Brands |
| EvoAir Holdings |
Bt Brands and EvoAir Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bt Brands and EvoAir Holdings
The main advantage of trading using opposite Bt Brands and EvoAir Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bt Brands position performs unexpectedly, EvoAir Holdings 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 EvoAir Holdings will offset losses from the drop in EvoAir Holdings' long position.| Bt Brands vs. Alsea SAB de | Bt Brands vs. Marstons PLC | Bt Brands vs. Bagger Daves Burger | Bt Brands vs. Marstons PLC |
| EvoAir Holdings vs. Genuine Parts Co | EvoAir Holdings vs. Olympic Steel | EvoAir Holdings vs. El Al Israel | EvoAir Holdings vs. Titan Machinery |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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