Correlation Between Plano Plano and British American
Can any of the company-specific risk be diversified away by investing in both Plano Plano 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 Plano Plano and British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plano Plano Desenvolvimento and British American Tobacco, you can compare the effects of market volatilities on Plano Plano 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 Plano Plano with a short position of British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plano Plano and British American.
Diversification Opportunities for Plano Plano and British American
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plano and British is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Plano Plano Desenvolvimento 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 Plano Plano 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 Plano Plano Desenvolvimento 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 Plano Plano i.e., Plano Plano and British American go up and down completely randomly.
Pair Corralation between Plano Plano and British American
Assuming the 90 days trading horizon Plano Plano Desenvolvimento is expected to under-perform the British American. In addition to that, Plano Plano is 1.59 times more volatile than British American Tobacco. It trades about -0.17 of its total potential returns per unit of risk. British American Tobacco is currently generating about 0.38 per unit of volatility. If you would invest 3,967 in British American Tobacco on August 24, 2024 and sell it today you would earn a total of 320.00 from holding British American Tobacco or generate 8.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plano Plano Desenvolvimento vs. British American Tobacco
Performance |
| Timeline |
| Plano Plano Desenvol |
| British American Tobacco |
Plano Plano and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plano Plano and British American
The main advantage of trading using opposite Plano Plano and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plano Plano 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.| Plano Plano vs. Brpr Corporate Offices | Plano Plano vs. Warner Music Group | Plano Plano vs. Autohome | Plano Plano vs. Metalrgica Riosulense SA |
| British American vs. BTG Pactual Logstica | British American vs. Plano Plano Desenvolvimento | British American vs. Companhia Habitasul de | British American vs. The Procter Gamble |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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