Correlation Between Batm Advanced and Petrochemical
Can any of the company-specific risk be diversified away by investing in both Batm Advanced and Petrochemical 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 Petrochemical 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 Petrochemical, you can compare the effects of market volatilities on Batm Advanced and Petrochemical 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 Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Petrochemical.
Diversification Opportunities for Batm Advanced and Petrochemical
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Batm and Petrochemical is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Petrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrochemical 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 Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrochemical has no effect on the direction of Batm Advanced i.e., Batm Advanced and Petrochemical go up and down completely randomly.
Pair Corralation between Batm Advanced and Petrochemical
Assuming the 90 days trading horizon Batm Advanced is expected to generate 16.14 times less return on investment than Petrochemical. But when comparing it to its historical volatility, Batm Advanced Communications is 1.13 times less risky than Petrochemical. It trades about 0.0 of its potential returns per unit of risk. Petrochemical is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 19,990 in Petrochemical on August 29, 2024 and sell it today you would earn a total of 60.00 from holding Petrochemical or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batm Advanced Communications vs. Petrochemical
Performance |
| Timeline |
| Batm Advanced Commun |
| Petrochemical |
Batm Advanced and Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and Petrochemical
The main advantage of trading using opposite Batm Advanced and Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced position performs unexpectedly, Petrochemical 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 Petrochemical will offset losses from the drop in Petrochemical's long position.| Batm Advanced vs. MediPress Health Limited Partnership | Batm Advanced vs. Gamatronic Electronic Industries | Batm Advanced vs. Suny Cellular Communication | Batm Advanced vs. Bezeq Israeli Telecommunication |
| Petrochemical vs. Brainsway | Petrochemical vs. Mivne Real Estate | Petrochemical vs. Israel Land Development | Petrochemical vs. Bezeq Israeli Telecommunication |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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