Correlation Between Batm Advanced and Volkswagen
Can any of the company-specific risk be diversified away by investing in both Batm Advanced and Volkswagen 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 Batm Advanced and Volkswagen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batm Advanced Communications and Volkswagen AG, you can compare the effects of market volatilities on Batm Advanced and Volkswagen 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 Batm Advanced with a short position of Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Volkswagen.
Diversification Opportunities for Batm Advanced and Volkswagen
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Batm and Volkswagen is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG and Batm Advanced 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 Batm Advanced Communications are associated (or correlated) with Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of Batm Advanced i.e., Batm Advanced and Volkswagen go up and down completely randomly.
Pair Corralation between Batm Advanced and Volkswagen
Assuming the 90 days trading horizon Batm Advanced Communications is expected to generate 1.8 times more return on investment than Volkswagen. However, Batm Advanced is 1.8 times more volatile than Volkswagen AG. It trades about -0.03 of its potential returns per unit of risk. Volkswagen AG is currently generating about -0.35 per unit of risk. If you would invest 2,000 in Batm Advanced Communications on August 26, 2024 and sell it today you would lose (65.00) from holding Batm Advanced Communications or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batm Advanced Communications vs. Volkswagen AG
Performance |
| Timeline |
| Batm Advanced Commun |
| Volkswagen AG |
Batm Advanced and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and Volkswagen
The main advantage of trading using opposite Batm Advanced and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| Batm Advanced vs. Quadrise Plc | Batm Advanced vs. ImmuPharma PLC | Batm Advanced vs. Intuitive Investments Group | Batm Advanced vs. European Metals Holdings |
| Volkswagen vs. Cairo Communication SpA | Volkswagen vs. Verizon Communications | Volkswagen vs. Batm Advanced Communications | Volkswagen vs. Polar Capital 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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