Correlation Between British Amer and Austal
Can any of the company-specific risk be diversified away by investing in both British Amer and Austal 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 Austal 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 Austal, you can compare the effects of market volatilities on British Amer and Austal 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 Austal. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Austal.
Diversification Opportunities for British Amer and Austal
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between British and Austal is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest and Austal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austal 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 Austal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austal has no effect on the direction of British Amer i.e., British Amer and Austal go up and down completely randomly.
Pair Corralation between British Amer and Austal
Assuming the 90 days trading horizon Bailador Technology Invest is expected to generate 0.46 times more return on investment than Austal. However, Bailador Technology Invest is 2.18 times less risky than Austal. It trades about -0.04 of its potential returns per unit of risk. Austal is currently generating about -0.32 per unit of risk. If you would invest 125.00 in Bailador Technology Invest on September 12, 2024 and sell it today you would lose (1.00) from holding Bailador Technology Invest or give up 0.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bailador Technology Invest vs. Austal
Performance |
| Timeline |
| Bailador Technology |
| Austal |
British Amer and Austal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Austal
The main advantage of trading using opposite British Amer and Austal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Austal 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 Austal will offset losses from the drop in Austal's long position.| British Amer vs. Aneka Tambang Tbk | British Amer vs. Commonwealth Bank | British Amer vs. BHP Group Limited | British Amer vs. Rio Tinto |
| Austal vs. Green Technology Metals | Austal vs. Bailador Technology Invest | Austal vs. Ainsworth Game Technology | Austal vs. Charter Hall Education |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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