Correlation Between Batm Advanced and Hiron Trade

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

Diversification Opportunities for Batm Advanced and Hiron Trade

-0.74

Correlation Coefficient

Batm Advanced  Hiron Trade

Pay attention - limited upside

The 3 months correlation between Batm and Hiron is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Hiron Trade Investments Indust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hiron Trade Investments 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 Hiron Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hiron Trade Investments has no effect on the direction of Batm Advanced i.e., Batm Advanced and Hiron Trade go up and down completely randomly.

Pair Corralation between Batm Advanced and Hiron Trade

Assuming the 90 days trading horizon Batm Advanced is expected to generate 1.22 times less return on investment than Hiron Trade. In addition to that, Batm Advanced is 1.69 times more volatile than Hiron Trade Investments Industrial. It trades about 0.08 of its total potential returns per unit of risk. Hiron Trade Investments Industrial is currently generating about 0.17 per unit of volatility. If you would invest  21,818,000  in Hiron Trade Investments Industrial on September 29, 2024 and sell it today you would earn a total of  912,000  from holding Hiron Trade Investments Industrial or generate 4.18% return on investment over 90 days.

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

Batm Advanced Communications  vs.  Hiron Trade Investments Indust

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.

Hiron Trade Investments

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hiron Trade Investments Industrial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hiron Trade may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Batm Advanced and Hiron Trade

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

The idea behind Batm Advanced Communications and Hiron Trade Investments Industrial 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.