Correlation Between Batm Advanced and Alliance Trust
Can any of the company-specific risk be diversified away by investing in both Batm Advanced and Alliance Trust 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 Alliance Trust 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 Alliance Trust PLC, you can compare the effects of market volatilities on Batm Advanced and Alliance Trust 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 Alliance Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Alliance Trust.
Diversification Opportunities for Batm Advanced and Alliance Trust
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Batm and Alliance is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Alliance Trust PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Trust 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 Alliance Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Trust PLC has no effect on the direction of Batm Advanced i.e., Batm Advanced and Alliance Trust go up and down completely randomly.
Pair Corralation between Batm Advanced and Alliance Trust
Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the Alliance Trust. In addition to that, Batm Advanced is 5.37 times more volatile than Alliance Trust PLC. It trades about -0.08 of its total potential returns per unit of risk. Alliance Trust PLC is currently generating about 0.2 per unit of volatility. If you would invest 121,000 in Alliance Trust PLC on September 3, 2024 and sell it today you would earn a total of 7,000 from holding Alliance Trust PLC or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.02% |
| Values | Daily Returns |
Batm Advanced Communications vs. Alliance Trust PLC
Performance |
| Timeline |
| Batm Advanced Commun |
| Alliance Trust PLC |
Batm Advanced and Alliance Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and Alliance Trust
The main advantage of trading using opposite Batm Advanced and Alliance Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced position performs unexpectedly, Alliance Trust 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 Alliance Trust will offset losses from the drop in Alliance Trust's long position.| Batm Advanced vs. Ecclesiastical Insurance Office | Batm Advanced vs. Bank of Ireland | Batm Advanced vs. Erste Group Bank | Batm Advanced vs. Fortune Brands Home |
| Alliance Trust vs. Batm Advanced Communications | Alliance Trust vs. Broadcom | Alliance Trust vs. MTI Wireless Edge | Alliance Trust vs. American Homes 4 |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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