Correlation Between RSL Electronics and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both RSL Electronics 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 RSL Electronics and Batm Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RSL Electronics and Batm Advanced Communications, you can compare the effects of market volatilities on RSL Electronics 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 RSL Electronics with a short position of Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of RSL Electronics and Batm Advanced.
Diversification Opportunities for RSL Electronics and Batm Advanced
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RSL and Batm is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding RSL Electronics 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 RSL Electronics 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 RSL Electronics 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 RSL Electronics i.e., RSL Electronics and Batm Advanced go up and down completely randomly.
Pair Corralation between RSL Electronics and Batm Advanced
Assuming the 90 days trading horizon RSL Electronics is expected to generate 1.33 times more return on investment than Batm Advanced. However, RSL Electronics is 1.33 times more volatile than Batm Advanced Communications. It trades about 0.09 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.02 per unit of risk. If you would invest 63,500 in RSL Electronics on August 30, 2024 and sell it today you would earn a total of 14,200 from holding RSL Electronics or generate 22.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RSL Electronics vs. Batm Advanced Communications
Performance |
| Timeline |
| RSL Electronics |
| Batm Advanced Commun |
RSL Electronics and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RSL Electronics and Batm Advanced
The main advantage of trading using opposite RSL Electronics and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RSL Electronics 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.| RSL Electronics vs. Ormat Technologies | RSL Electronics vs. Multi Retail Group | RSL Electronics vs. Nova | RSL Electronics vs. B Communications |
| Batm Advanced vs. B Communications | Batm Advanced vs. Holmes Place International | Batm Advanced vs. Nova | Batm Advanced vs. Petrochemical |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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