Correlation Between TAAT Global and British Amer
Can any of the company-specific risk be diversified away by investing in both TAAT Global and British Amer 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 TAAT Global and British Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAAT Global Alternatives and British American Tobacco, you can compare the effects of market volatilities on TAAT Global and British Amer 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 TAAT Global with a short position of British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAAT Global and British Amer.
Diversification Opportunities for TAAT Global and British Amer
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between TAAT and British is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding TAAT Global Alternatives 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 TAAT Global 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 TAAT Global Alternatives are associated (or correlated) with British Amer. 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 TAAT Global i.e., TAAT Global and British Amer go up and down completely randomly.
Pair Corralation between TAAT Global and British Amer
Assuming the 90 days horizon TAAT Global Alternatives is expected to under-perform the British Amer. In addition to that, TAAT Global is 15.96 times more volatile than British American Tobacco. It trades about -0.07 of its total potential returns per unit of risk. British American Tobacco is currently generating about 0.42 per unit of volatility. If you would invest 3,491 in British American Tobacco on August 28, 2024 and sell it today you would earn a total of 280.00 from holding British American Tobacco or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAAT Global Alternatives vs. British American Tobacco
Performance |
| Timeline |
| TAAT Global Alternatives |
| British American Tobacco |
TAAT Global and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAAT Global and British Amer
The main advantage of trading using opposite TAAT Global and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAAT Global position performs unexpectedly, British Amer 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 Amer will offset losses from the drop in British Amer's long position.| TAAT Global vs. Greenlane Holdings | TAAT Global vs. Turning Point Brands | TAAT Global vs. Green Globe International | TAAT Global vs. Kaival Brands Innovations |
| British Amer vs. Imperial Brands PLC | British Amer vs. Philip Morris International | British Amer vs. Japan Tobacco ADR | British Amer vs. Imperial Brands PLC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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