Correlation Between British Amer and Nsx
Can any of the company-specific risk be diversified away by investing in both British Amer and Nsx 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 Nsx 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 Nsx, you can compare the effects of market volatilities on British Amer and Nsx 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 Nsx. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Nsx.
Diversification Opportunities for British Amer and Nsx
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between British and Nsx is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest and Nsx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nsx 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 Nsx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nsx has no effect on the direction of British Amer i.e., British Amer and Nsx go up and down completely randomly.
Pair Corralation between British Amer and Nsx
Assuming the 90 days trading horizon Bailador Technology Invest is expected to generate 0.24 times more return on investment than Nsx. However, Bailador Technology Invest is 4.24 times less risky than Nsx. It trades about 0.03 of its potential returns per unit of risk. Nsx is currently generating about -0.02 per unit of risk. If you would invest 111.00 in Bailador Technology Invest on November 27, 2024 and sell it today you would earn a total of 14.00 from holding Bailador Technology Invest or generate 12.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bailador Technology Invest vs. Nsx
Performance |
| Timeline |
| Bailador Technology |
| Nsx |
British Amer and Nsx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Nsx
The main advantage of trading using opposite British Amer and Nsx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Nsx 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 Nsx will offset losses from the drop in Nsx's long position.| British Amer vs. Skycity Entertainment Group | British Amer vs. Champion Iron | British Amer vs. TPG Telecom | British Amer vs. Autosports 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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