Correlation Between Baylin Technologies and Metalert

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

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

Diversification Opportunities for Baylin Technologies and Metalert

0.38

Correlation Coefficient

Baylin Technologies  Metalert

Weak diversification

The 3 months correlation between Baylin and Metalert is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Baylin Technologies and Metalert in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalert and Baylin Technologies 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 Baylin Technologies are associated (or correlated) with Metalert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalert has no effect on the direction of Baylin Technologies i.e., Baylin Technologies and Metalert go up and down completely randomly.

Pair Corralation between Baylin Technologies and Metalert

Assuming the 90 days horizon Baylin Technologies is expected to generate 3.56 times more return on investment than Metalert. However, Baylin Technologies is 3.56 times more volatile than Metalert. It trades about 0.06 of its potential returns per unit of risk. Metalert is currently generating about 0.05 per unit of risk. If you would invest  29.00  in Baylin Technologies on September 3, 2024 and sell it today you would earn a total of  7.00  from holding Baylin Technologies or generate 24.14% return on investment over 90 days.

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

Baylin Technologies  vs.  Metalert

Baylin Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baylin Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Baylin Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Metalert

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Metalert are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Metalert unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Baylin Technologies and Metalert

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

The idea behind Baylin Technologies and Metalert 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.