Correlation Between British Amer and EnX
Can any of the company-specific risk be diversified away by investing in both British Amer and EnX 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 EnX 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 enX Group, you can compare the effects of market volatilities on British Amer and EnX 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 EnX. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and EnX.
Diversification Opportunities for British Amer and EnX
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between British and EnX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and enX Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enX Group 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 EnX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enX Group has no effect on the direction of British Amer i.e., British Amer and EnX go up and down completely randomly.
Pair Corralation between British Amer and EnX
If you would invest 6,322,100 in British American Tobacco on September 12, 2024 and sell it today you would earn a total of 440,800 from holding British American Tobacco or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
British American Tobacco vs. enX Group
Performance |
| Timeline |
| British American Tobacco |
| enX Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
British Amer and EnX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and EnX
The main advantage of trading using opposite British Amer and EnX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, EnX 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 EnX will offset losses from the drop in EnX's long position.| British Amer vs. Safari Investments RSA | British Amer vs. Kap Industrial Holdings | British Amer vs. Hosken Consolidated Investments | British Amer vs. Bytes Technology |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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