Correlation Between Billion Electric and CyberTAN Technology

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

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

Diversification Opportunities for Billion Electric and CyberTAN Technology

-0.49

Correlation Coefficient

Billion Electric  CyberTAN Technology

Very good diversification

The 3 months correlation between Billion and CyberTAN is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Billion Electric Co and CyberTAN Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberTAN Technology and Billion Electric 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 Billion Electric Co are associated (or correlated) with CyberTAN Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberTAN Technology has no effect on the direction of Billion Electric i.e., Billion Electric and CyberTAN Technology go up and down completely randomly.

Pair Corralation between Billion Electric and CyberTAN Technology

Assuming the 90 days trading horizon Billion Electric Co is expected to generate 1.18 times more return on investment than CyberTAN Technology. However, Billion Electric is 1.18 times more volatile than CyberTAN Technology. It trades about 0.11 of its potential returns per unit of risk. CyberTAN Technology is currently generating about -0.21 per unit of risk. If you would invest  2,980  in Billion Electric Co on December 25, 2024 and sell it today you would earn a total of  375.00  from holding Billion Electric Co or generate 12.58% return on investment over 90 days.

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

Billion Electric Co  vs.  CyberTAN Technology

Billion Electric

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Billion Electric Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Billion Electric showed solid returns over the last few months and may actually be approaching a breakup point.

CyberTAN Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days CyberTAN Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Billion Electric and CyberTAN Technology

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

The idea behind Billion Electric Co and CyberTAN Technology 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 Anywhere module to track or share privately all of your investments from the convenience of any device.