Correlation Between Future Metals and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both Future 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 Future 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 Future Metals NL and Batm Advanced Communications, you can compare the effects of market volatilities on Future 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 Future Metals with a short position of Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Future Metals and Batm Advanced.
Diversification Opportunities for Future Metals and Batm Advanced
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Future and Batm is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Future Metals NL 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 Future 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 Future Metals NL 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 Future Metals i.e., Future Metals and Batm Advanced go up and down completely randomly.
Pair Corralation between Future Metals and Batm Advanced
Assuming the 90 days trading horizon Future Metals NL is expected to under-perform the Batm Advanced. In addition to that, Future Metals is 1.17 times more volatile than Batm Advanced Communications. It trades about -0.3 of its total potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.07 per unit of volatility. If you would invest 1,730 in Batm Advanced Communications on August 31, 2024 and sell it today you would earn a total of 58.00 from holding Batm Advanced Communications or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Future Metals NL vs. Batm Advanced Communications
Performance |
| Timeline |
| Future Metals NL |
| Batm Advanced Commun |
Future Metals and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Future Metals and Batm Advanced
The main advantage of trading using opposite Future Metals and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Future 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.| Future Metals vs. G5 Entertainment AB | Future Metals vs. Cairo Communication SpA | Future Metals vs. Centaur Media | Future Metals vs. Hollywood Bowl Group |
| Batm Advanced vs. CVR Energy | Batm Advanced vs. Viridian Therapeutics | Batm Advanced vs. Nationwide Building Society | Batm Advanced vs. News Corp Cl |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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