Correlation Between Buff Technologies and Opal Balance
Can any of the company-specific risk be diversified away by investing in both Buff Technologies and Opal Balance 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 Buff Technologies and Opal Balance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buff Technologies and Opal Balance, you can compare the effects of market volatilities on Buff Technologies and Opal Balance 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 Buff Technologies with a short position of Opal Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buff Technologies and Opal Balance.
Diversification Opportunities for Buff Technologies and Opal Balance
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Buff and Opal is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Buff Technologies and Opal Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opal Balance and Buff Technologies 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 Buff Technologies are associated (or correlated) with Opal Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opal Balance has no effect on the direction of Buff Technologies i.e., Buff Technologies and Opal Balance go up and down completely randomly.
Pair Corralation between Buff Technologies and Opal Balance
Assuming the 90 days trading horizon Buff Technologies is expected to generate 4.91 times more return on investment than Opal Balance. However, Buff Technologies is 4.91 times more volatile than Opal Balance. It trades about 0.11 of its potential returns per unit of risk. Opal Balance is currently generating about 0.21 per unit of risk. If you would invest 168,500 in Buff Technologies on November 28, 2024 and sell it today you would earn a total of 19,500 from holding Buff Technologies or generate 11.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Buff Technologies vs. Opal Balance
Performance |
| Timeline |
| Buff Technologies |
| Opal Balance |
Buff Technologies and Opal Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buff Technologies and Opal Balance
The main advantage of trading using opposite Buff Technologies and Opal Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buff Technologies position performs unexpectedly, Opal Balance 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 Opal Balance will offset losses from the drop in Opal Balance's long position.| Buff Technologies vs. Feat Fund Investments | Buff Technologies vs. Analyst IMS Investment | Buff Technologies vs. Discount Investment Corp | Buff Technologies vs. Harel Insurance Investments |
| Opal Balance vs. Nawi Brothers Group | Opal Balance vs. EN Shoham Business | Opal Balance vs. Peninsula Group | Opal Balance vs. Shikun Binui |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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