Correlation Between Batm Advanced and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both Batm Advanced and Antofagasta PLC 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 Antofagasta PLC 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 Antofagasta PLC, you can compare the effects of market volatilities on Batm Advanced and Antofagasta PLC 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 Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Antofagasta PLC.
Diversification Opportunities for Batm Advanced and Antofagasta PLC
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Batm and Antofagasta is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC 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 Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of Batm Advanced i.e., Batm Advanced and Antofagasta PLC go up and down completely randomly.
Pair Corralation between Batm Advanced and Antofagasta PLC
Assuming the 90 days trading horizon Batm Advanced Communications is expected to generate 1.53 times more return on investment than Antofagasta PLC. However, Batm Advanced is 1.53 times more volatile than Antofagasta PLC. It trades about -0.03 of its potential returns per unit of risk. Antofagasta PLC is currently generating about -0.14 per unit of risk. If you would invest 2,000 in Batm Advanced Communications on August 25, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batm Advanced Communications vs. Antofagasta PLC
Performance |
| Timeline |
| Batm Advanced Commun |
| Antofagasta PLC |
Batm Advanced and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and Antofagasta PLC
The main advantage of trading using opposite Batm Advanced and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced position performs unexpectedly, Antofagasta PLC 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 Antofagasta PLC will offset losses from the drop in Antofagasta PLC's long position.| Batm Advanced vs. Samsung Electronics Co | Batm Advanced vs. Samsung Electronics Co | Batm Advanced vs. Hyundai Motor | Batm Advanced vs. Toyota Motor Corp |
| Antofagasta PLC vs. Batm Advanced Communications | Antofagasta PLC vs. Thor Mining PLC | Antofagasta PLC vs. GoldMining | Antofagasta PLC vs. Eastinco Mining Exploration |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |