Correlation Between Definity Financial and British Amer
Can any of the company-specific risk be diversified away by investing in both Definity Financial and British Amer 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 Definity Financial and British Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Definity Financial Corp and biOasis Technologies, you can compare the effects of market volatilities on Definity Financial and British Amer 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 Definity Financial with a short position of British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Definity Financial and British Amer.
Diversification Opportunities for Definity Financial and British Amer
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Definity and British is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Definity Financial Corp and biOasis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on biOasis Technologies and Definity Financial 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 Definity Financial Corp are associated (or correlated) with British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of biOasis Technologies has no effect on the direction of Definity Financial i.e., Definity Financial and British Amer go up and down completely randomly.
Pair Corralation between Definity Financial and British Amer
Assuming the 90 days trading horizon Definity Financial is expected to generate 418.31 times less return on investment than British Amer. But when comparing it to its historical volatility, Definity Financial Corp is 290.39 times less risky than British Amer. It trades about 0.23 of its potential returns per unit of risk. biOasis Technologies is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 125.00 in biOasis Technologies on August 30, 2024 and sell it today you would lose (124.50) from holding biOasis Technologies or give up 99.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Definity Financial Corp vs. biOasis Technologies
Performance |
| Timeline |
| Definity Financial Corp |
| biOasis Technologies |
Definity Financial and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Definity Financial and British Amer
The main advantage of trading using opposite Definity Financial and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Definity Financial position performs unexpectedly, British Amer 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 British Amer will offset losses from the drop in British Amer's long position.| Definity Financial vs. Trisura Group | Definity Financial vs. Pet Valu Holdings | Definity Financial vs. Intact Financial | Definity Financial vs. Topaz Energy Corp |
| British Amer vs. AKITA Drilling | British Amer vs. 2028 Investment Grade | British Amer vs. Stampede Drilling | British Amer vs. CNJ Capital Investments |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Transaction History View history of all your transactions and understand their impact on performance |