Correlation Between Red Oak and Bats Series
Can any of the company-specific risk be diversified away by investing in both Red Oak and Bats Series 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 Red Oak and Bats Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Oak Technology and Bats Series C, you can compare the effects of market volatilities on Red Oak and Bats Series 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 Red Oak with a short position of Bats Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Oak and Bats Series.
Diversification Opportunities for Red Oak and Bats Series
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Red and Bats is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Red Oak Technology and Bats Series C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bats Series C and Red Oak 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 Red Oak Technology are associated (or correlated) with Bats Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bats Series C has no effect on the direction of Red Oak i.e., Red Oak and Bats Series go up and down completely randomly.
Pair Corralation between Red Oak and Bats Series
Assuming the 90 days horizon Red Oak Technology is expected to generate 5.89 times more return on investment than Bats Series. However, Red Oak is 5.89 times more volatile than Bats Series C. It trades about -0.09 of its potential returns per unit of risk. Bats Series C is currently generating about -0.54 per unit of risk. If you would invest 4,948 in Red Oak Technology on October 11, 2024 and sell it today you would lose (160.00) from holding Red Oak Technology or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Oak Technology vs. Bats Series C
Performance |
| Timeline |
| Red Oak Technology |
| Bats Series C |
Red Oak and Bats Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Oak and Bats Series
The main advantage of trading using opposite Red Oak and Bats Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Oak position performs unexpectedly, Bats Series 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 Bats Series will offset losses from the drop in Bats Series' long position.| Red Oak vs. Pin Oak Equity | Red Oak vs. White Oak Select | Red Oak vs. Black Oak Emerging | Red Oak vs. Berkshire Focus |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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