Correlation Between British Amer and Afine Investments
Can any of the company-specific risk be diversified away by investing in both British Amer and Afine Investments 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 Afine Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and Afine Investments, you can compare the effects of market volatilities on British Amer and Afine Investments 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 Afine Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Afine Investments.
Diversification Opportunities for British Amer and Afine Investments
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between British and Afine is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and Afine Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afine Investments 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 British American Tobacco are associated (or correlated) with Afine Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afine Investments has no effect on the direction of British Amer i.e., British Amer and Afine Investments go up and down completely randomly.
Pair Corralation between British Amer and Afine Investments
If you would invest 6,170,000 in British American Tobacco on August 24, 2024 and sell it today you would earn a total of 465,400 from holding British American Tobacco or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
British American Tobacco vs. Afine Investments
Performance |
| Timeline |
| British American Tobacco |
| Afine Investments |
British Amer and Afine Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Afine Investments
The main advantage of trading using opposite British Amer and Afine Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Afine Investments 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 Afine Investments will offset losses from the drop in Afine Investments' long position.| British Amer vs. Capitec Bank Holdings | British Amer vs. HomeChoice Investments | British Amer vs. Hosken Consolidated Investments | British Amer vs. Life Healthcare |
| Afine Investments vs. Schroder European Real | Afine Investments vs. Centaur Bci Balanced | Afine Investments vs. Sabvest Capital | Afine Investments vs. Growthpoint Properties |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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