Correlation Between American Virtual and Banxa Holdings

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

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

Diversification Opportunities for American Virtual and Banxa Holdings

0.0

Correlation Coefficient

American Virtual  Banxa Holdings

Pay attention - limited upside

The 3 months correlation between American and Banxa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Virtual Cloud and Banxa Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banxa Holdings and American Virtual 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 American Virtual Cloud are associated (or correlated) with Banxa Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banxa Holdings has no effect on the direction of American Virtual i.e., American Virtual and Banxa Holdings go up and down completely randomly.

Pair Corralation between American Virtual and Banxa Holdings

If you would invest  66.00  in Banxa Holdings on December 2, 2024 and sell it today you would earn a total of  2.00  from holding Banxa Holdings or generate 3.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

American Virtual Cloud  vs.  Banxa Holdings

American Virtual Cloud

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Virtual Cloud has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, American Virtual is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Banxa Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Banxa Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Banxa Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Virtual and Banxa Holdings

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

The idea behind American Virtual Cloud and Banxa Holdings 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..