Correlation Between BT Brands and Gan
Can any of the company-specific risk be diversified away by investing in both BT Brands and Gan 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 Gan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BT Brands Warrant and Gan, you can compare the effects of market volatilities on BT Brands and Gan 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 Gan. Check out your portfolio center. Please also check ongoing floating volatility patterns of BT Brands and Gan.
Diversification Opportunities for BT Brands and Gan
Very good diversification
The 3 months correlation between BTBDW and Gan is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding BT Brands Warrant and Gan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan 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 Warrant are associated (or correlated) with Gan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan has no effect on the direction of BT Brands i.e., BT Brands and Gan go up and down completely randomly.
Pair Corralation between BT Brands and Gan
Assuming the 90 days horizon BT Brands Warrant is expected to generate 11.28 times more return on investment than Gan. However, BT Brands is 11.28 times more volatile than Gan. It trades about 0.4 of its potential returns per unit of risk. Gan is currently generating about 0.03 per unit of risk. If you would invest 7.47 in BT Brands Warrant on August 27, 2024 and sell it today you would earn a total of 1.92 from holding BT Brands Warrant or generate 25.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 28.57% |
| Values | Daily Returns |
BT Brands Warrant vs. Gan
Performance |
| Timeline |
| BT Brands Warrant |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Gan |
BT Brands and Gan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BT Brands and Gan
The main advantage of trading using opposite BT Brands and Gan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BT Brands position performs unexpectedly, Gan 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 Gan will offset losses from the drop in Gan's long position.The idea behind BT Brands Warrant and Gan pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Gan vs. Rush Street Interactive | Gan vs. Inspired Entertainment | Gan vs. PointsBet Holdings Limited | Gan vs. PlayAGS |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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