Correlation Between British Amer and Anax Metals
Can any of the company-specific risk be diversified away by investing in both British Amer and Anax Metals 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 British Amer and Anax Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bailador Technology Invest and Anax Metals, you can compare the effects of market volatilities on British Amer and Anax Metals 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 British Amer with a short position of Anax Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Anax Metals.
Diversification Opportunities for British Amer and Anax Metals
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between British and Anax is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest and Anax Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anax Metals and British Amer 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 Bailador Technology Invest are associated (or correlated) with Anax Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anax Metals has no effect on the direction of British Amer i.e., British Amer and Anax Metals go up and down completely randomly.
Pair Corralation between British Amer and Anax Metals
Assuming the 90 days trading horizon Bailador Technology Invest is expected to generate 0.2 times more return on investment than Anax Metals. However, Bailador Technology Invest is 4.88 times less risky than Anax Metals. It trades about 0.03 of its potential returns per unit of risk. Anax Metals is currently generating about -0.03 per unit of risk. If you would invest 110.00 in Bailador Technology Invest on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Bailador Technology Invest or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bailador Technology Invest vs. Anax Metals
Performance |
| Timeline |
| Bailador Technology |
| Anax Metals |
British Amer and Anax Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Anax Metals
The main advantage of trading using opposite British Amer and Anax Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Anax Metals 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 Anax Metals will offset losses from the drop in Anax Metals' long position.| British Amer vs. Embark Education Group | British Amer vs. Diversified United Investment | British Amer vs. Cleanaway Waste Management | British Amer vs. MFF Capital Investments |
| Anax Metals vs. Computershare | Anax Metals vs. Bailador Technology Invest | Anax Metals vs. Toys R Us | Anax Metals vs. Aeon Metals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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