Correlation Between European Metals and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both European Metals and Batm Advanced 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 European Metals and Batm Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and Batm Advanced Communications, you can compare the effects of market volatilities on European Metals and Batm Advanced 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 European Metals with a short position of Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Batm Advanced.
Diversification Opportunities for European Metals and Batm Advanced
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between European and Batm is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun and European Metals 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 European Metals Holdings are associated (or correlated) with Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of European Metals i.e., European Metals and Batm Advanced go up and down completely randomly.
Pair Corralation between European Metals and Batm Advanced
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the Batm Advanced. In addition to that, European Metals is 1.28 times more volatile than Batm Advanced Communications. It trades about -0.07 of its total potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.0 per unit of volatility. If you would invest 2,420 in Batm Advanced Communications on August 30, 2024 and sell it today you would lose (540.00) from holding Batm Advanced Communications or give up 22.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
European Metals Holdings vs. Batm Advanced Communications
Performance |
| Timeline |
| European Metals Holdings |
| Batm Advanced Commun |
European Metals and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and Batm Advanced
The main advantage of trading using opposite European Metals and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals position performs unexpectedly, Batm Advanced 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 Batm Advanced will offset losses from the drop in Batm Advanced's long position.| European Metals vs. Dunedin Enterprise Investment | European Metals vs. Microchip Technology | European Metals vs. TechnipFMC PLC | European Metals vs. Mineral Financial Investments |
| Batm Advanced vs. Samsung Electronics Co | Batm Advanced vs. Samsung Electronics Co | Batm Advanced vs. Toyota Motor Corp | Batm Advanced vs. Reliance Industries Ltd |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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