Correlation Between TRADEDOUBLER and British American
Can any of the company-specific risk be diversified away by investing in both TRADEDOUBLER 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 TRADEDOUBLER and British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEDOUBLER AB SK and British American Tobacco, you can compare the effects of market volatilities on TRADEDOUBLER 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 TRADEDOUBLER with a short position of British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEDOUBLER and British American.
Diversification Opportunities for TRADEDOUBLER and British American
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between TRADEDOUBLER and British is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding TRADEDOUBLER AB SK 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 TRADEDOUBLER 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 TRADEDOUBLER AB SK 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 TRADEDOUBLER i.e., TRADEDOUBLER and British American go up and down completely randomly.
Pair Corralation between TRADEDOUBLER and British American
Assuming the 90 days horizon TRADEDOUBLER AB SK is expected to generate 3.23 times more return on investment than British American. However, TRADEDOUBLER is 3.23 times more volatile than British American Tobacco. It trades about 0.01 of its potential returns per unit of risk. British American Tobacco is currently generating about 0.02 per unit of risk. If you would invest 32.00 in TRADEDOUBLER AB SK on September 13, 2024 and sell it today you would lose (6.00) from holding TRADEDOUBLER AB SK or give up 18.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRADEDOUBLER AB SK vs. British American Tobacco
Performance |
| Timeline |
| TRADEDOUBLER AB SK |
| British American Tobacco |
TRADEDOUBLER and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEDOUBLER and British American
The main advantage of trading using opposite TRADEDOUBLER and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEDOUBLER 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.| TRADEDOUBLER vs. Superior Plus Corp | TRADEDOUBLER vs. SIVERS SEMICONDUCTORS AB | TRADEDOUBLER vs. NorAm Drilling AS | TRADEDOUBLER vs. Norsk Hydro ASA |
| British American vs. Consolidated Communications Holdings | British American vs. Align Technology | British American vs. FANDIFI TECHNOLOGY P | British American vs. X FAB Silicon Foundries |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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