Correlation Between Flagship Investments and British Amer
Can any of the company-specific risk be diversified away by investing in both Flagship Investments 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 Flagship Investments and British Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flagship Investments and Bailador Technology Invest, you can compare the effects of market volatilities on Flagship Investments 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 Flagship Investments with a short position of British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flagship Investments and British Amer.
Diversification Opportunities for Flagship Investments and British Amer
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flagship and British is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Flagship Investments and Bailador Technology Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bailador Technology and Flagship Investments 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 Flagship Investments 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 Flagship Investments i.e., Flagship Investments and British Amer go up and down completely randomly.
Pair Corralation between Flagship Investments and British Amer
Assuming the 90 days trading horizon Flagship Investments is expected to generate 1.14 times more return on investment than British Amer. However, Flagship Investments is 1.14 times more volatile than Bailador Technology Invest. It trades about 0.05 of its potential returns per unit of risk. Bailador Technology Invest is currently generating about 0.03 per unit of risk. If you would invest 162.00 in Flagship Investments on September 3, 2024 and sell it today you would earn a total of 53.00 from holding Flagship Investments or generate 32.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flagship Investments vs. Bailador Technology Invest
Performance |
| Timeline |
| Flagship Investments |
| Bailador Technology |
Flagship Investments and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flagship Investments and British Amer
The main advantage of trading using opposite Flagship Investments and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flagship Investments 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.| Flagship Investments vs. Aurelia Metals | Flagship Investments vs. Aeon Metals | Flagship Investments vs. Cleanaway Waste Management | Flagship Investments vs. Strickland Metals |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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