Correlation Between BT Brands and Bt Brands

Can any of the company-specific risk be diversified away by investing in both BT Brands and Bt Brands 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 BT Brands and Bt Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BT Brands Warrant and Bt Brands, you can compare the effects of market volatilities on BT Brands and Bt Brands 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 BT Brands with a short position of Bt Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of BT Brands and Bt Brands.

Diversification Opportunities for BT Brands and Bt Brands

0.0

Correlation Coefficient

BT Brands  Bt Brands

Pay attention - limited upside

The 3 months correlation between BTBDW and BTBD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BT Brands Warrant and Bt Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bt Brands and BT Brands 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 BT Brands Warrant are associated (or correlated) with Bt Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bt Brands has no effect on the direction of BT Brands i.e., BT Brands and Bt Brands go up and down completely randomly.

Pair Corralation between BT Brands and Bt Brands

Assuming the 90 days horizon BT Brands Warrant is expected to generate 4.92 times more return on investment than Bt Brands. However, BT Brands is 4.92 times more volatile than Bt Brands. It trades about 0.12 of its potential returns per unit of risk. Bt Brands is currently generating about 0.01 per unit of risk. If you would invest  8.96  in BT Brands Warrant on September 15, 2024 and sell it today you would earn a total of  0.43  from holding BT Brands Warrant or generate 4.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	21.88%
Values	Daily Returns

BT Brands Warrant  vs.  Bt Brands

BT Brands Warrant

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days BT Brands Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unsteady fundamental indicators, BT Brands showed solid returns over the last few months and may actually be approaching a breakup point.

Bt Brands

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bt Brands are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Bt Brands is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BT Brands and Bt Brands

The main advantage of trading using opposite BT Brands and Bt Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BT Brands position performs unexpectedly, Bt Brands 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 Brands will offset losses from the drop in Bt Brands' long position.

The idea behind BT Brands Warrant and Bt Brands 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.