Correlation Between Bt Brands and Global Net
Can any of the company-specific risk be diversified away by investing in both Bt Brands and Global Net 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 Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bt Brands and Global Net Lease, you can compare the effects of market volatilities on Bt Brands and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bt Brands and Global Net.
Diversification Opportunities for Bt Brands and Global Net
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BTBD and Global is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bt Brands and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Bt Brands i.e., Bt Brands and Global Net go up and down completely randomly.
Pair Corralation between Bt Brands and Global Net
Given the investment horizon of 90 days Bt Brands is expected to generate 3.04 times more return on investment than Global Net. However, Bt Brands is 3.04 times more volatile than Global Net Lease. It trades about 0.06 of its potential returns per unit of risk. Global Net Lease is currently generating about -0.04 per unit of risk. If you would invest 160.00 in Bt Brands on October 13, 2024 and sell it today you would earn a total of 6.00 from holding Bt Brands or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bt Brands vs. Global Net Lease
Performance |
| Timeline |
| Bt Brands |
| Global Net Lease |
Bt Brands and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bt Brands and Global Net
The main advantage of trading using opposite Bt Brands and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bt Brands position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net'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 |
| Global Net vs. Bt Brands | Global Net vs. Constellation Brands Class | Global Net vs. Philip Morris International | Global Net vs. Vita Coco |
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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