Correlation Between Ecofibre and British Amer
Can any of the company-specific risk be diversified away by investing in both Ecofibre 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 Ecofibre and British Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecofibre and Bailador Technology Invest, you can compare the effects of market volatilities on Ecofibre 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 Ecofibre with a short position of British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecofibre and British Amer.
Diversification Opportunities for Ecofibre and British Amer
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ecofibre and British is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ecofibre and Bailador Technology Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bailador Technology and Ecofibre 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 Ecofibre 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 Bailador Technology has no effect on the direction of Ecofibre i.e., Ecofibre and British Amer go up and down completely randomly.
Pair Corralation between Ecofibre and British Amer
Assuming the 90 days trading horizon Ecofibre is expected to generate 6.9 times more return on investment than British Amer. However, Ecofibre is 6.9 times more volatile than Bailador Technology Invest. It trades about 0.04 of its potential returns per unit of risk. Bailador Technology Invest is currently generating about 0.11 per unit of risk. If you would invest 2.90 in Ecofibre on September 12, 2024 and sell it today you would earn a total of 0.10 from holding Ecofibre or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecofibre vs. Bailador Technology Invest
Performance |
| Timeline |
| Ecofibre |
| Bailador Technology |
Ecofibre and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecofibre and British Amer
The main advantage of trading using opposite Ecofibre and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecofibre 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.| Ecofibre vs. Computershare | Ecofibre vs. Retail Food Group | Ecofibre vs. Hutchison Telecommunications | Ecofibre vs. Oneview Healthcare PLC |
| British Amer vs. Embark Education Group | British Amer vs. Diversified United Investment | British Amer vs. Cleanaway Waste Management | British Amer vs. MFF 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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