Correlation Between Batm Advanced and Victory Supermarket

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

Diversification Opportunities for Batm Advanced and Victory Supermarket

-0.74

Correlation Coefficient

Batm Advanced  Victory Supermarket

Pay attention - limited upside

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

Pair Corralation between Batm Advanced and Victory Supermarket

Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the Victory Supermarket. In addition to that, Batm Advanced is 1.37 times more volatile than Victory Supermarket Chain. It trades about -0.14 of its total potential returns per unit of risk. Victory Supermarket Chain is currently generating about 0.14 per unit of volatility. If you would invest  508,000  in Victory Supermarket Chain on September 30, 2024 and sell it today you would earn a total of  51,700  from holding Victory Supermarket Chain or generate 10.18% 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.  Victory Supermarket Chain

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.

Victory Supermarket Chain

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Supermarket Chain are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Victory Supermarket sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Batm Advanced and Victory Supermarket

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

The idea behind Batm Advanced Communications and Victory Supermarket Chain 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.