Correlation Between British Amer and BKI Investment
Can any of the company-specific risk be diversified away by investing in both British Amer and BKI Investment 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 BKI Investment 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 BKI Investment, you can compare the effects of market volatilities on British Amer and BKI Investment 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 BKI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and BKI Investment.
Diversification Opportunities for British Amer and BKI Investment
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between British and BKI is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest and BKI Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKI Investment 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 BKI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKI Investment has no effect on the direction of British Amer i.e., British Amer and BKI Investment go up and down completely randomly.
Pair Corralation between British Amer and BKI Investment
Assuming the 90 days trading horizon Bailador Technology Invest is expected to generate 1.46 times more return on investment than BKI Investment. However, British Amer is 1.46 times more volatile than BKI Investment. It trades about 0.06 of its potential returns per unit of risk. BKI Investment is currently generating about 0.04 per unit of risk. If you would invest 117.00 in Bailador Technology Invest on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Bailador Technology Invest or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bailador Technology Invest vs. BKI Investment
Performance |
| Timeline |
| Bailador Technology |
| BKI Investment |
British Amer and BKI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and BKI Investment
The main advantage of trading using opposite British Amer and BKI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, BKI Investment 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 BKI Investment will offset losses from the drop in BKI Investment's long position.| British Amer vs. WA1 Resources | British Amer vs. Predictive Discovery | British Amer vs. Cooper Metals | British Amer vs. OD6 Metals |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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