Correlation Between 3M and BAYNGR
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By analyzing existing cross correlation between 3M Company and BAYNGR 4625 25 JUN 38, you can compare the effects of market volatilities on 3M and BAYNGR 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 3M with a short position of BAYNGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and BAYNGR.
Diversification Opportunities for 3M and BAYNGR
Very weak diversification
The 3 months correlation between 3M and BAYNGR is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and BAYNGR 4625 25 JUN 38 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAYNGR 4625 25 and 3M 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 3M Company are associated (or correlated) with BAYNGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAYNGR 4625 25 has no effect on the direction of 3M i.e., 3M and BAYNGR go up and down completely randomly.
Pair Corralation between 3M and BAYNGR
Considering the 90-day investment horizon 3M Company is expected to generate 1.17 times more return on investment than BAYNGR. However, 3M is 1.17 times more volatile than BAYNGR 4625 25 JUN 38. It trades about 0.08 of its potential returns per unit of risk. BAYNGR 4625 25 JUN 38 is currently generating about 0.02 per unit of risk. If you would invest 8,501 in 3M Company on August 29, 2024 and sell it today you would earn a total of 4,747 from holding 3M Company or generate 55.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 63.78% |
| Values | Daily Returns |
3M Company vs. BAYNGR 4625 25 JUN 38
Performance |
| Timeline |
| 3M Company |
| BAYNGR 4625 25 |
3M and BAYNGR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and BAYNGR
The main advantage of trading using opposite 3M and BAYNGR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, BAYNGR 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 BAYNGR will offset losses from the drop in BAYNGR's long position.The idea behind 3M Company and BAYNGR 4625 25 JUN 38 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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