Correlation Between Orient Telecoms and British American
Can any of the company-specific risk be diversified away by investing in both Orient Telecoms and British American 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 Orient Telecoms and British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Telecoms and British American Tobacco, you can compare the effects of market volatilities on Orient Telecoms and British American 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 Orient Telecoms with a short position of British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Telecoms and British American.
Diversification Opportunities for Orient Telecoms and British American
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Orient and British is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Orient Telecoms and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco and Orient Telecoms 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 Orient Telecoms are associated (or correlated) with British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of Orient Telecoms i.e., Orient Telecoms and British American go up and down completely randomly.
Pair Corralation between Orient Telecoms and British American
If you would invest 3,449 in British American Tobacco on August 30, 2024 and sell it today you would earn a total of 354.00 from holding British American Tobacco or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orient Telecoms vs. British American Tobacco
Performance |
| Timeline |
| Orient Telecoms |
| British American Tobacco |
Orient Telecoms and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Telecoms and British American
The main advantage of trading using opposite Orient Telecoms and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Telecoms position performs unexpectedly, British American 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 American will offset losses from the drop in British American's long position.| Orient Telecoms vs. CVR Energy | Orient Telecoms vs. Viridian Therapeutics | Orient Telecoms vs. Dollar Tree | Orient Telecoms vs. News Corp Cl |
| British American vs. Tungsten West PLC | British American vs. Argo Group Limited | British American vs. Hardide PLC | British American vs. Versarien PLC |
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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