Correlation Between Batm Advanced and Itay Financial
Can any of the company-specific risk be diversified away by investing in both Batm Advanced and Itay Financial 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 Itay Financial 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 Itay Financial AA, you can compare the effects of market volatilities on Batm Advanced and Itay Financial 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 Itay Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Itay Financial.
Diversification Opportunities for Batm Advanced and Itay Financial
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Batm and Itay is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Itay Financial AA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itay Financial AA 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 Itay Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itay Financial AA has no effect on the direction of Batm Advanced i.e., Batm Advanced and Itay Financial go up and down completely randomly.
Pair Corralation between Batm Advanced and Itay Financial
Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the Itay Financial. But the stock apears to be less risky and, when comparing its historical volatility, Batm Advanced Communications is 1.6 times less risky than Itay Financial. The stock trades about -0.01 of its potential returns per unit of risk. The Itay Financial AA is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 27,000 in Itay Financial AA on September 13, 2024 and sell it today you would earn a total of 11,900 from holding Itay Financial AA or generate 44.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batm Advanced Communications vs. Itay Financial AA
Performance |
| Timeline |
| Batm Advanced Commun |
| Itay Financial AA |
Batm Advanced and Itay Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and Itay Financial
The main advantage of trading using opposite Batm Advanced and Itay Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced position performs unexpectedly, Itay Financial 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 Itay Financial will offset losses from the drop in Itay Financial's long position.| Batm Advanced vs. Storage Drop Storage | Batm Advanced vs. B Communications | Batm Advanced vs. Photomyne | Batm Advanced vs. M Yochananof and |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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