Correlation Between FLOW TRADERS and Bill Holdings
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS and Bill Holdings 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 FLOW TRADERS and Bill Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and Bill Holdings, you can compare the effects of market volatilities on FLOW TRADERS and Bill Holdings 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 FLOW TRADERS with a short position of Bill Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Bill Holdings.
Diversification Opportunities for FLOW TRADERS and Bill Holdings
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FLOW and Bill is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and Bill Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bill Holdings and FLOW TRADERS 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 FLOW TRADERS LTD are associated (or correlated) with Bill Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bill Holdings has no effect on the direction of FLOW TRADERS i.e., FLOW TRADERS and Bill Holdings go up and down completely randomly.
Pair Corralation between FLOW TRADERS and Bill Holdings
Assuming the 90 days horizon FLOW TRADERS is expected to generate 12.29 times less return on investment than Bill Holdings. But when comparing it to its historical volatility, FLOW TRADERS LTD is 4.02 times less risky than Bill Holdings. It trades about 0.13 of its potential returns per unit of risk. Bill Holdings is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 5,350 in Bill Holdings on September 5, 2024 and sell it today you would earn a total of 2,823 from holding Bill Holdings or generate 52.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. Bill Holdings
Performance |
| Timeline |
| FLOW TRADERS LTD |
| Bill Holdings |
FLOW TRADERS and Bill Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and Bill Holdings
The main advantage of trading using opposite FLOW TRADERS and Bill Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS position performs unexpectedly, Bill Holdings 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 Bill Holdings will offset losses from the drop in Bill Holdings' long position.| FLOW TRADERS vs. Tyson Foods | FLOW TRADERS vs. AGRICULTBK HADR25 YC | FLOW TRADERS vs. Penta Ocean Construction Co | FLOW TRADERS vs. Hanison Construction Holdings |
| Bill Holdings vs. NORWEGIAN AIR SHUT | Bill Holdings vs. Diamyd Medical AB | Bill Holdings vs. Altair Engineering | Bill Holdings vs. Corsair Gaming |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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