Correlation Between Itay Financial and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both Itay Financial 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 Itay Financial and Batm Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itay Financial AA and Batm Advanced Communications, you can compare the effects of market volatilities on Itay Financial 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 Itay Financial with a short position of Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itay Financial and Batm Advanced.
Diversification Opportunities for Itay Financial and Batm Advanced
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Itay and Batm is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Itay Financial AA 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 Itay Financial 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 Itay Financial AA 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 Itay Financial i.e., Itay Financial and Batm Advanced go up and down completely randomly.
Pair Corralation between Itay Financial and Batm Advanced
Assuming the 90 days trading horizon Itay Financial AA is expected to generate 26.92 times more return on investment than Batm Advanced. However, Itay Financial is 26.92 times more volatile than Batm Advanced Communications. It trades about 0.05 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about -0.04 per unit of risk. If you would invest 6,030 in Itay Financial AA on September 12, 2024 and sell it today you would earn a total of 29,170 from holding Itay Financial AA or generate 483.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itay Financial AA vs. Batm Advanced Communications
Performance |
| Timeline |
| Itay Financial AA |
| Batm Advanced Commun |
Itay Financial and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itay Financial and Batm Advanced
The main advantage of trading using opposite Itay Financial and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itay Financial 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.| Itay Financial vs. Direct Capital Investments | Itay Financial vs. Netz Hotels | Itay Financial vs. Opal Balance | Itay Financial vs. B Communications |
| Batm Advanced vs. Storage Drop Storage | Batm Advanced vs. B Communications | Batm Advanced vs. Photomyne | Batm Advanced vs. M Yochananof and |
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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