Correlation Between Batm Advanced and Hamama

Can any of the company-specific risk be diversified away by investing in both Batm Advanced and Hamama 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 Hamama 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 Hamama, you can compare the effects of market volatilities on Batm Advanced and Hamama 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 Hamama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Hamama.

Diversification Opportunities for Batm Advanced and Hamama

0.54

Correlation Coefficient

Batm Advanced  Hamama

Very weak diversification

The 3 months correlation between Batm and Hamama is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Hamama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamama 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 Hamama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamama has no effect on the direction of Batm Advanced i.e., Batm Advanced and Hamama go up and down completely randomly.

Pair Corralation between Batm Advanced and Hamama

Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the Hamama. But the stock apears to be less risky and, when comparing its historical volatility, Batm Advanced Communications is 1.07 times less risky than Hamama. The stock trades about -0.14 of its potential returns per unit of risk. The Hamama is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  41,660  in Hamama on September 29, 2024 and sell it today you would lose (3,760) from holding Hamama or give up 9.03% of portfolio value over 90 days.

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

Batm Advanced Communications  vs.  Hamama

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. Despite weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hamama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hamama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Batm Advanced and Hamama

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

The idea behind Batm Advanced Communications and Hamama 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.