Correlation Between Baylin Technologies and BK Technologies
Can any of the company-specific risk be diversified away by investing in both Baylin Technologies and BK Technologies 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 BK Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baylin Technologies and BK Technologies, you can compare the effects of market volatilities on Baylin Technologies and BK Technologies 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 BK Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baylin Technologies and BK Technologies.
Diversification Opportunities for Baylin Technologies and BK Technologies
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baylin and BKTI is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Baylin Technologies and BK Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BK Technologies 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 BK Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BK Technologies has no effect on the direction of Baylin Technologies i.e., Baylin Technologies and BK Technologies go up and down completely randomly.
Pair Corralation between Baylin Technologies and BK Technologies
Assuming the 90 days horizon Baylin Technologies is expected to generate 13.41 times more return on investment than BK Technologies. However, Baylin Technologies is 13.41 times more volatile than BK Technologies. It trades about 0.06 of its potential returns per unit of risk. BK Technologies is currently generating about 0.06 per unit of risk. If you would invest 29.00 in Baylin Technologies on August 27, 2024 and sell it today you would earn a total of 7.00 from holding Baylin Technologies or generate 24.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baylin Technologies vs. BK Technologies
Performance |
| Timeline |
| Baylin Technologies |
| BK Technologies |
Baylin Technologies and BK Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baylin Technologies and BK Technologies
The main advantage of trading using opposite Baylin Technologies and BK Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baylin Technologies position performs unexpectedly, BK Technologies 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 BK Technologies will offset losses from the drop in BK Technologies' long position.| Baylin Technologies vs. Boxlight Corp Class | Baylin Technologies vs. Siyata Mobile | Baylin Technologies vs. ClearOne | Baylin Technologies vs. HUMANA INC |
| BK Technologies vs. Frequency Electronics | BK Technologies vs. Actelis Networks | BK Technologies vs. Optical Cable | BK Technologies vs. Baylin Technologies |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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