Correlation Between Baylin Technologies and Pollard Banknote
Can any of the company-specific risk be diversified away by investing in both Baylin Technologies and Pollard Banknote 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 Baylin Technologies and Pollard Banknote into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baylin Technologies and Pollard Banknote Limited, you can compare the effects of market volatilities on Baylin Technologies and Pollard Banknote 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 Baylin Technologies with a short position of Pollard Banknote. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baylin Technologies and Pollard Banknote.
Diversification Opportunities for Baylin Technologies and Pollard Banknote
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Baylin and Pollard is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Baylin Technologies and Pollard Banknote Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pollard Banknote and Baylin Technologies 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 Baylin Technologies are associated (or correlated) with Pollard Banknote. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pollard Banknote has no effect on the direction of Baylin Technologies i.e., Baylin Technologies and Pollard Banknote go up and down completely randomly.
Pair Corralation between Baylin Technologies and Pollard Banknote
Assuming the 90 days trading horizon Baylin Technologies is expected to under-perform the Pollard Banknote. In addition to that, Baylin Technologies is 2.98 times more volatile than Pollard Banknote Limited. It trades about -0.12 of its total potential returns per unit of risk. Pollard Banknote Limited is currently generating about 0.13 per unit of volatility. If you would invest 2,405 in Pollard Banknote Limited on August 27, 2024 and sell it today you would earn a total of 160.00 from holding Pollard Banknote Limited or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baylin Technologies vs. Pollard Banknote Limited
Performance |
| Timeline |
| Baylin Technologies |
| Pollard Banknote |
Baylin Technologies and Pollard Banknote Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baylin Technologies and Pollard Banknote
The main advantage of trading using opposite Baylin Technologies and Pollard Banknote positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baylin Technologies position performs unexpectedly, Pollard Banknote 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 Pollard Banknote will offset losses from the drop in Pollard Banknote's long position.| Baylin Technologies vs. Current Water Technologies | Baylin Technologies vs. Sparta Capital | Baylin Technologies vs. Fintech Select | Baylin Technologies vs. iShares Canadian HYBrid |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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