Correlation Between Bet-at-home and Illinois Tool
Can any of the company-specific risk be diversified away by investing in both Bet-at-home and Illinois Tool 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-home and Illinois Tool 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 Illinois Tool Works, you can compare the effects of market volatilities on Bet-at-home and Illinois Tool 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-home with a short position of Illinois Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet-at-home and Illinois Tool.
Diversification Opportunities for Bet-at-home and Illinois Tool
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bet-at-home and Illinois is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and Illinois Tool Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Illinois Tool Works and Bet-at-home 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 Illinois Tool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Illinois Tool Works has no effect on the direction of Bet-at-home i.e., Bet-at-home and Illinois Tool go up and down completely randomly.
Pair Corralation between Bet-at-home and Illinois Tool
Assuming the 90 days trading horizon bet at home AG is expected to under-perform the Illinois Tool. In addition to that, Bet-at-home is 2.95 times more volatile than Illinois Tool Works. It trades about -0.03 of its total potential returns per unit of risk. Illinois Tool Works is currently generating about 0.05 per unit of volatility. If you would invest 21,481 in Illinois Tool Works on September 26, 2024 and sell it today you would earn a total of 3,149 from holding Illinois Tool Works or generate 14.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
bet at home AG vs. Illinois Tool Works
Performance |
Timeline |
bet at home |
Illinois Tool Works |
Bet-at-home and Illinois Tool Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bet-at-home and Illinois Tool
The main advantage of trading using opposite Bet-at-home and Illinois Tool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet-at-home position performs unexpectedly, Illinois Tool 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 Illinois Tool will offset losses from the drop in Illinois Tool's long position.Bet-at-home vs. Apple Inc | Bet-at-home vs. Apple Inc | Bet-at-home vs. Microsoft | Bet-at-home vs. Microsoft |
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Check out your portfolio center.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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