Correlation Between British Amer and Perpetual Credit
Can any of the company-specific risk be diversified away by investing in both British Amer and Perpetual Credit 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 Perpetual Credit 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 Perpetual Credit Income, you can compare the effects of market volatilities on British Amer and Perpetual Credit 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 Perpetual Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Perpetual Credit.
Diversification Opportunities for British Amer and Perpetual Credit
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between British and Perpetual is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest and Perpetual Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perpetual Credit Income 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 Perpetual Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perpetual Credit Income has no effect on the direction of British Amer i.e., British Amer and Perpetual Credit go up and down completely randomly.
Pair Corralation between British Amer and Perpetual Credit
Assuming the 90 days trading horizon Bailador Technology Invest is expected to under-perform the Perpetual Credit. But the stock apears to be less risky and, when comparing its historical volatility, Bailador Technology Invest is 1.49 times less risky than Perpetual Credit. The stock trades about -0.01 of its potential returns per unit of risk. The Perpetual Credit Income is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 114.00 in Perpetual Credit Income on November 27, 2024 and sell it today you would earn a total of 4.00 from holding Perpetual Credit Income or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bailador Technology Invest vs. Perpetual Credit Income
Performance |
| Timeline |
| Bailador Technology |
| Perpetual Credit Income |
British Amer and Perpetual Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Perpetual Credit
The main advantage of trading using opposite British Amer and Perpetual Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Perpetual Credit 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 Perpetual Credit will offset losses from the drop in Perpetual Credit's long position.| British Amer vs. Skycity Entertainment Group | British Amer vs. Champion Iron | British Amer vs. TPG Telecom | British Amer vs. Autosports Group |
| Perpetual Credit vs. Centrex Metals | Perpetual Credit vs. Black Rock Mining | Perpetual Credit vs. Aussie Broadband | Perpetual Credit vs. Global Data Centre |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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