Correlation Between Batm Advanced and Big Tech
Can any of the company-specific risk be diversified away by investing in both Batm Advanced and Big Tech 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 Big Tech 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 Big Tech 50, you can compare the effects of market volatilities on Batm Advanced and Big Tech 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 Big Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Big Tech.
Diversification Opportunities for Batm Advanced and Big Tech
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Batm and Big is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Big Tech 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Tech 50 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 Big Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Tech 50 has no effect on the direction of Batm Advanced i.e., Batm Advanced and Big Tech go up and down completely randomly.
Pair Corralation between Batm Advanced and Big Tech
Assuming the 90 days trading horizon Batm Advanced Communications is expected to generate 1.06 times more return on investment than Big Tech. However, Batm Advanced is 1.06 times more volatile than Big Tech 50. It trades about 0.02 of its potential returns per unit of risk. Big Tech 50 is currently generating about -0.14 per unit of risk. If you would invest 8,350 in Batm Advanced Communications on August 30, 2024 and sell it today you would earn a total of 210.00 from holding Batm Advanced Communications or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batm Advanced Communications vs. Big Tech 50
Performance |
| Timeline |
| Batm Advanced Commun |
| Big Tech 50 |
Batm Advanced and Big Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and Big Tech
The main advantage of trading using opposite Batm Advanced and Big Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced position performs unexpectedly, Big Tech 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 Big Tech will offset losses from the drop in Big Tech's long position.| Batm Advanced vs. B Communications | Batm Advanced vs. Holmes Place International | Batm Advanced vs. Nova | Batm Advanced vs. Petrochemical |
| Big Tech vs. Meitav Dash Investments | Big Tech vs. YD More Investments | Big Tech vs. Analyst IMS Investment |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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