Correlation Between Sporttotal and BII Railway
Can any of the company-specific risk be diversified away by investing in both Sporttotal and BII Railway 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 Sporttotal and BII Railway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sporttotal AG and BII Railway Transportation, you can compare the effects of market volatilities on Sporttotal and BII Railway 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 Sporttotal with a short position of BII Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sporttotal and BII Railway.
Diversification Opportunities for Sporttotal and BII Railway
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sporttotal and BII is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sporttotal AG and BII Railway Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BII Railway Transpor and Sporttotal 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 Sporttotal AG are associated (or correlated) with BII Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BII Railway Transpor has no effect on the direction of Sporttotal i.e., Sporttotal and BII Railway go up and down completely randomly.
Pair Corralation between Sporttotal and BII Railway
Assuming the 90 days trading horizon Sporttotal is expected to generate 1.96 times less return on investment than BII Railway. In addition to that, Sporttotal is 1.19 times more volatile than BII Railway Transportation. It trades about 0.0 of its total potential returns per unit of risk. BII Railway Transportation is currently generating about 0.01 per unit of volatility. If you would invest 3.15 in BII Railway Transportation on August 24, 2024 and sell it today you would lose (0.45) from holding BII Railway Transportation or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sporttotal AG vs. BII Railway Transportation
Performance |
| Timeline |
| Sporttotal AG |
| BII Railway Transpor |
Sporttotal and BII Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sporttotal and BII Railway
The main advantage of trading using opposite Sporttotal and BII Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sporttotal position performs unexpectedly, BII Railway 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 BII Railway will offset losses from the drop in BII Railway's long position.The idea behind Sporttotal AG and BII Railway Transportation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BII Railway vs. AEGEAN AIRLINES | BII Railway vs. JAPAN AIRLINES | BII Railway vs. Gladstone Investment | BII Railway vs. MGIC INVESTMENT |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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