Correlation Between PM Capital and British Amer
Can any of the company-specific risk be diversified away by investing in both PM Capital and British Amer 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 PM Capital and British Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PM Capital Global and Bailador Technology Invest, you can compare the effects of market volatilities on PM Capital and British Amer 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 PM Capital with a short position of British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of PM Capital and British Amer.
Diversification Opportunities for PM Capital and British Amer
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PGF and British is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding PM Capital Global and Bailador Technology Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bailador Technology and PM Capital 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 PM Capital Global are associated (or correlated) with British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bailador Technology has no effect on the direction of PM Capital i.e., PM Capital and British Amer go up and down completely randomly.
Pair Corralation between PM Capital and British Amer
Assuming the 90 days trading horizon PM Capital Global is expected to generate 1.03 times more return on investment than British Amer. However, PM Capital is 1.03 times more volatile than Bailador Technology Invest. It trades about 0.09 of its potential returns per unit of risk. Bailador Technology Invest is currently generating about 0.01 per unit of risk. If you would invest 186.00 in PM Capital Global on August 29, 2024 and sell it today you would earn a total of 41.00 from holding PM Capital Global or generate 22.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.53% |
| Values | Daily Returns |
PM Capital Global vs. Bailador Technology Invest
Performance |
| Timeline |
| PM Capital Global |
| Bailador Technology |
PM Capital and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PM Capital and British Amer
The main advantage of trading using opposite PM Capital and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PM Capital position performs unexpectedly, British Amer 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 Amer will offset losses from the drop in British Amer's long position.| PM Capital vs. Hotel Property Investments | PM Capital vs. Alto Metals | PM Capital vs. Group 6 Metals | PM Capital vs. MFF Capital Investments |
| British Amer vs. Champion Iron | British Amer vs. Ridley | British Amer vs. Peel Mining | British Amer vs. Australian Dairy Farms |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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