Correlation Between Science In and BT Group
Can any of the company-specific risk be diversified away by investing in both Science In and BT Group 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 Science In and BT Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Science in Sport and BT Group Plc, you can compare the effects of market volatilities on Science In and BT Group 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 Science In with a short position of BT Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science In and BT Group.
Diversification Opportunities for Science In and BT Group
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Science and BT-A is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Science in Sport and BT Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BT Group Plc and Science In 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 Science in Sport are associated (or correlated) with BT Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BT Group Plc has no effect on the direction of Science In i.e., Science In and BT Group go up and down completely randomly.
Pair Corralation between Science In and BT Group
Assuming the 90 days trading horizon Science in Sport is expected to generate 1.56 times more return on investment than BT Group. However, Science In is 1.56 times more volatile than BT Group Plc. It trades about 0.06 of its potential returns per unit of risk. BT Group Plc is currently generating about 0.03 per unit of risk. If you would invest 1,350 in Science in Sport on August 26, 2024 and sell it today you would earn a total of 1,250 from holding Science in Sport or generate 92.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Science in Sport vs. BT Group Plc
Performance |
| Timeline |
| Science in Sport |
| BT Group Plc |
Science In and BT Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Science In and BT Group
The main advantage of trading using opposite Science In and BT Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Science In position performs unexpectedly, BT Group 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 BT Group will offset losses from the drop in BT Group's long position.| Science In vs. British American Tobacco | Science In vs. Vitec Software Group | Science In vs. Hollywood Bowl Group | Science In vs. LBG Media PLC |
| BT Group vs. Scandic Hotels Group | BT Group vs. Futura Medical | BT Group vs. Solstad Offshore ASA | BT Group vs. Prosiebensat 1 Media |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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