Correlation Between British Amer and Iluka Resources
Can any of the company-specific risk be diversified away by investing in both British Amer and Iluka Resources 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 Iluka Resources 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 Iluka Resources, you can compare the effects of market volatilities on British Amer and Iluka Resources 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 Iluka Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Iluka Resources.
Diversification Opportunities for British Amer and Iluka Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between British and Iluka is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest and Iluka Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iluka Resources 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 Iluka Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iluka Resources has no effect on the direction of British Amer i.e., British Amer and Iluka Resources go up and down completely randomly.
Pair Corralation between British Amer and Iluka Resources
Assuming the 90 days trading horizon Bailador Technology Invest is expected to generate 0.56 times more return on investment than Iluka Resources. However, Bailador Technology Invest is 1.8 times less risky than Iluka Resources. It trades about 0.04 of its potential returns per unit of risk. Iluka Resources is currently generating about -0.08 per unit of risk. If you would invest 108.00 in Bailador Technology Invest on September 2, 2024 and sell it today you would earn a total of 18.00 from holding Bailador Technology Invest or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bailador Technology Invest vs. Iluka Resources
Performance |
| Timeline |
| Bailador Technology |
| Iluka Resources |
British Amer and Iluka Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Iluka Resources
The main advantage of trading using opposite British Amer and Iluka Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Iluka Resources 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 Iluka Resources will offset losses from the drop in Iluka Resources' long position.| British Amer vs. WA1 Resources | British Amer vs. Predictive Discovery | British Amer vs. Cooper Metals | British Amer vs. OD6 Metals |
| Iluka Resources vs. National Storage REIT | Iluka Resources vs. RLF AgTech | Iluka Resources vs. Computershare | Iluka Resources vs. Srj Technologies Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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