Correlation Between Bet At and Abingdon Health

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

By analyzing existing cross correlation between bet at home AG and Abingdon Health Plc, you can compare the effects of market volatilities on Bet At and Abingdon Health 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 Bet At with a short position of Abingdon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet At and Abingdon Health.

Diversification Opportunities for Bet At and Abingdon Health

0.58

Correlation Coefficient

Bet At  Abingdon Health

Very weak diversification

The 3 months correlation between Bet and Abingdon is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and Abingdon Health Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abingdon Health Plc and Bet At 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 bet at home AG are associated (or correlated) with Abingdon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abingdon Health Plc has no effect on the direction of Bet At i.e., Bet At and Abingdon Health go up and down completely randomly.

Pair Corralation between Bet At and Abingdon Health

Assuming the 90 days trading horizon bet at home AG is expected to generate 2.03 times more return on investment than Abingdon Health. However, Bet At is 2.03 times more volatile than Abingdon Health Plc. It trades about 0.31 of its potential returns per unit of risk. Abingdon Health Plc is currently generating about 0.14 per unit of risk. If you would invest  255.00  in bet at home AG on October 23, 2024 and sell it today you would earn a total of  39.00  from holding bet at home AG or generate 15.29% return on investment over 90 days.

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

bet at home AG  vs.  Abingdon Health Plc

bet at home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days bet at home AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bet At is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Abingdon Health Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Abingdon Health Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Abingdon Health is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bet At and Abingdon Health

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

The idea behind bet at home AG and Abingdon Health Plc 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.