Correlation Between Batm Advanced and Overstock

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

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

Diversification Opportunities for Batm Advanced and Overstock

0.41

Correlation Coefficient

Batm Advanced  Overstock

Very weak diversification

The 3 months correlation between Batm and Overstock is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Overstock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overstock and Batm Advanced 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 Batm Advanced Communications are associated (or correlated) with Overstock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overstock has no effect on the direction of Batm Advanced i.e., Batm Advanced and Overstock go up and down completely randomly.

Pair Corralation between Batm Advanced and Overstock

Assuming the 90 days trading horizon Batm Advanced Communications is expected to generate 0.62 times more return on investment than Overstock. However, Batm Advanced Communications is 1.6 times less risky than Overstock. It trades about 0.18 of its potential returns per unit of risk. Overstock is currently generating about -0.4 per unit of risk. If you would invest  1,738  in Batm Advanced Communications on October 1, 2024 and sell it today you would earn a total of  142.00  from holding Batm Advanced Communications or generate 8.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Batm Advanced Communications  vs.  Overstock

Batm Advanced Commun

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Batm Advanced Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Batm Advanced is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Overstock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Overstock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Batm Advanced and Overstock

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

The idea behind Batm Advanced Communications and Overstock 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.