Correlation Between Batm Advanced and Black Sea

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Can any of the company-specific risk be diversified away by investing in both Batm Advanced and Black Sea 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 Black Sea 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 Black Sea Property, you can compare the effects of market volatilities on Batm Advanced and Black Sea 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 Black Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Black Sea.

Diversification Opportunities for Batm Advanced and Black Sea

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between Batm and Black is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Black Sea Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Sea Property 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 Black Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Sea Property has no effect on the direction of Batm Advanced i.e., Batm Advanced and Black Sea go up and down completely randomly.

Pair Corralation between Batm Advanced and Black Sea

Assuming the 90 days trading horizon Batm Advanced Communications is expected to generate 0.61 times more return on investment than Black Sea. However, Batm Advanced Communications is 1.64 times less risky than Black Sea. It trades about -0.09 of its potential returns per unit of risk. Black Sea Property is currently generating about -0.13 per unit of risk. If you would invest  9,120  in Batm Advanced Communications on September 14, 2024 and sell it today you would lose (440.00) from holding Batm Advanced Communications or give up 4.82% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy94.74%
ValuesDaily Returns

Batm Advanced Communications  vs.  Black Sea Property

 Performance 
       Timeline  
Batm Advanced Commun 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Batm Advanced Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Black Sea Property 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Black Sea Property has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Black Sea is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Batm Advanced and Black Sea Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Batm Advanced and Black Sea

The main advantage of trading using opposite Batm Advanced and Black Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced position performs unexpectedly, Black Sea 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 Black Sea will offset losses from the drop in Black Sea's long position.
The idea behind Batm Advanced Communications and Black Sea Property pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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