Correlation Between BATSLN and Dow Jones
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By analyzing existing cross correlation between BATSLN 475 01 NOV 42 and Dow Jones Industrial, you can compare the effects of market volatilities on BATSLN and Dow Jones 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 BATSLN with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of BATSLN and Dow Jones.
Diversification Opportunities for BATSLN and Dow Jones
Good diversification
The 3 months correlation between BATSLN and Dow is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding BATSLN 475 01 NOV 42 and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and BATSLN 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 BATSLN 475 01 NOV 42 are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of BATSLN i.e., BATSLN and Dow Jones go up and down completely randomly.
Pair Corralation between BATSLN and Dow Jones
Assuming the 90 days trading horizon BATSLN 475 01 NOV 42 is expected to generate 2.65 times more return on investment than Dow Jones. However, BATSLN is 2.65 times more volatile than Dow Jones Industrial. It trades about 0.23 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.22 per unit of risk. If you would invest 7,966 in BATSLN 475 01 NOV 42 on August 27, 2024 and sell it today you would earn a total of 425.00 from holding BATSLN 475 01 NOV 42 or generate 5.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 42.86% |
| Values | Daily Returns |
BATSLN 475 01 NOV 42 vs. Dow Jones Industrial
Performance |
| Timeline |
BATSLN and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
BATSLN 475 01 NOV 42
Pair trading matchups for BATSLN
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with BATSLN and Dow Jones
The main advantage of trading using opposite BATSLN and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BATSLN position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| BATSLN vs. Aegon NV ADR | BATSLN vs. Boston Beer | BATSLN vs. Diageo PLC ADR | BATSLN vs. Fevertree Drinks Plc |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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