Correlation Between Premier African and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both Premier African and Batm Advanced 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 Premier African and Batm Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier African Minerals and Batm Advanced Communications, you can compare the effects of market volatilities on Premier African and Batm Advanced 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 Premier African with a short position of Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier African and Batm Advanced.
Diversification Opportunities for Premier African and Batm Advanced
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Premier and Batm is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Premier African Minerals and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun and Premier African 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 Premier African Minerals are associated (or correlated) with Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of Premier African i.e., Premier African and Batm Advanced go up and down completely randomly.
Pair Corralation between Premier African and Batm Advanced
Assuming the 90 days trading horizon Premier African Minerals is expected to under-perform the Batm Advanced. In addition to that, Premier African is 2.8 times more volatile than Batm Advanced Communications. It trades about -0.02 of its total potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.05 per unit of volatility. If you would invest 1,600 in Batm Advanced Communications on September 23, 2024 and sell it today you would earn a total of 248.00 from holding Batm Advanced Communications or generate 15.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier African Minerals vs. Batm Advanced Communications
Performance |
| Timeline |
| Premier African Minerals |
| Batm Advanced Commun |
Premier African and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier African and Batm Advanced
The main advantage of trading using opposite Premier African and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier African position performs unexpectedly, Batm Advanced 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 Batm Advanced will offset losses from the drop in Batm Advanced's long position.| Premier African vs. Raytheon Technologies Corp | Premier African vs. TechnipFMC PLC | Premier African vs. Lowland Investment Co | Premier African vs. Livermore Investments Group |
| Batm Advanced vs. SupplyMe Capital PLC | Batm Advanced vs. Lloyds Banking Group | Batm Advanced vs. Premier African Minerals | Batm Advanced vs. SANTANDER UK 8 |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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