Correlation Between British Amer and Step One
Can any of the company-specific risk be diversified away by investing in both British Amer and Step One 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 Step One 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 Step One Clothing, you can compare the effects of market volatilities on British Amer and Step One 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 Step One. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Step One.
Diversification Opportunities for British Amer and Step One
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between British and Step is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest and Step One Clothing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Step One Clothing 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 Step One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Step One Clothing has no effect on the direction of British Amer i.e., British Amer and Step One go up and down completely randomly.
Pair Corralation between British Amer and Step One
Assuming the 90 days trading horizon Bailador Technology Invest is expected to generate 0.21 times more return on investment than Step One. However, Bailador Technology Invest is 4.87 times less risky than Step One. It trades about -0.21 of its potential returns per unit of risk. Step One Clothing is currently generating about -0.06 per unit of risk. If you would invest 129.00 in Bailador Technology Invest on September 15, 2024 and sell it today you would lose (4.00) from holding Bailador Technology Invest or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bailador Technology Invest vs. Step One Clothing
Performance |
| Timeline |
| Bailador Technology |
| Step One Clothing |
British Amer and Step One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Step One
The main advantage of trading using opposite British Amer and Step One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Step One 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 Step One will offset losses from the drop in Step One's long position.| British Amer vs. Audio Pixels Holdings | British Amer vs. Iodm | British Amer vs. Nsx | British Amer vs. TTG Fintech |
| Step One vs. Wt Financial Group | Step One vs. Insignia Financial | Step One vs. EP Financial Group | Step One vs. National Australia Bank |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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