Correlation Between Information and BA Airport
Can any of the company-specific risk be diversified away by investing in both Information and BA Airport 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 Information and BA Airport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information and Communication and BA Airport Leasehold, you can compare the effects of market volatilities on Information and BA Airport 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 Information with a short position of BA Airport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information and BA Airport.
Diversification Opportunities for Information and BA Airport
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Information and BAREIT is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Information and Communication and BA Airport Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BA Airport Leasehold and Information 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 Information and Communication are associated (or correlated) with BA Airport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BA Airport Leasehold has no effect on the direction of Information i.e., Information and BA Airport go up and down completely randomly.
Pair Corralation between Information and BA Airport
Assuming the 90 days trading horizon Information and Communication is expected to under-perform the BA Airport. In addition to that, Information is 1.82 times more volatile than BA Airport Leasehold. It trades about -0.03 of its total potential returns per unit of risk. BA Airport Leasehold is currently generating about 0.02 per unit of volatility. If you would invest 885.00 in BA Airport Leasehold on September 3, 2024 and sell it today you would earn a total of 55.00 from holding BA Airport Leasehold or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information and Communication vs. BA Airport Leasehold
Performance |
| Timeline |
| Information and Comm |
| BA Airport Leasehold |
Information and BA Airport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information and BA Airport
The main advantage of trading using opposite Information and BA Airport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information position performs unexpectedly, BA Airport 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 BA Airport will offset losses from the drop in BA Airport's long position.| Information vs. Hana Microelectronics Public | Information vs. Ekachai Medical Care | Information vs. Megachem Public | Information vs. Intouch Holdings Public |
| BA Airport vs. Delta Electronics Public | BA Airport vs. Delta Electronics Public | BA Airport vs. Airports of Thailand | BA Airport vs. Airports of Thailand |
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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