Correlation Between Ba Ria and FIT INVEST

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

By analyzing existing cross correlation between Ba Ria Thermal and FIT INVEST JSC, you can compare the effects of market volatilities on Ba Ria and FIT INVEST 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 Ba Ria with a short position of FIT INVEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ba Ria and FIT INVEST.

Diversification Opportunities for Ba Ria and FIT INVEST

0.6

Correlation Coefficient

Ba Ria  FIT INVEST

Poor diversification

The 3 months correlation between BTP and FIT is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ba Ria Thermal and FIT INVEST JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIT INVEST JSC and Ba Ria 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 Ba Ria Thermal are associated (or correlated) with FIT INVEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIT INVEST JSC has no effect on the direction of Ba Ria i.e., Ba Ria and FIT INVEST go up and down completely randomly.

Pair Corralation between Ba Ria and FIT INVEST

Assuming the 90 days trading horizon Ba Ria Thermal is expected to generate 1.14 times more return on investment than FIT INVEST. However, Ba Ria is 1.14 times more volatile than FIT INVEST JSC. It trades about 0.02 of its potential returns per unit of risk. FIT INVEST JSC is currently generating about 0.0 per unit of risk. If you would invest  1,091,563  in Ba Ria Thermal on September 15, 2024 and sell it today you would earn a total of  73,437  from holding Ba Ria Thermal or generate 6.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ba Ria Thermal  vs.  FIT INVEST JSC

Ba Ria Thermal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ba Ria Thermal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

FIT INVEST JSC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FIT INVEST JSC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, FIT INVEST is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ba Ria and FIT INVEST

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

The idea behind Ba Ria Thermal and FIT INVEST JSC 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.