Correlation Between Batm Advanced and Ilex Medical

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

Diversification Opportunities for Batm Advanced and Ilex Medical

-0.65

Correlation Coefficient

Batm Advanced  Ilex Medical

Excellent diversification

The 3 months correlation between Batm and Ilex is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Ilex Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilex Medical 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 Ilex Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilex Medical has no effect on the direction of Batm Advanced i.e., Batm Advanced and Ilex Medical go up and down completely randomly.

Pair Corralation between Batm Advanced and Ilex Medical

Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the Ilex Medical. In addition to that, Batm Advanced is 1.1 times more volatile than Ilex Medical. It trades about -0.09 of its total potential returns per unit of risk. Ilex Medical is currently generating about 0.56 per unit of volatility. If you would invest  650,200  in Ilex Medical on September 17, 2024 and sell it today you would earn a total of  171,900  from holding Ilex Medical or generate 26.44% 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.  Ilex Medical

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.

Ilex Medical

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ilex Medical are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ilex Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Batm Advanced and Ilex Medical

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

The idea behind Batm Advanced Communications and Ilex Medical 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.