Correlation Between BankInvest Optima and BankInvest Basis

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

By analyzing existing cross correlation between BankInvest Optima 75 and BankInvest Basis, you can compare the effects of market volatilities on BankInvest Optima and BankInvest Basis 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 BankInvest Optima with a short position of BankInvest Basis. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankInvest Optima and BankInvest Basis.

Diversification Opportunities for BankInvest Optima and BankInvest Basis

0.0

Correlation Coefficient

BankInvest Optima  BankInvest Basis

Pay attention - limited upside

The 3 months correlation between BankInvest and BankInvest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Optima 75 and BankInvest Basis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Basis and BankInvest Optima 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 BankInvest Optima 75 are associated (or correlated) with BankInvest Basis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Basis has no effect on the direction of BankInvest Optima i.e., BankInvest Optima and BankInvest Basis go up and down completely randomly.

Pair Corralation between BankInvest Optima and BankInvest Basis

If you would invest (100.00) in BankInvest Basis on December 28, 2024 and sell it today you would earn a total of  100.00  from holding BankInvest Basis or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BankInvest Optima 75  vs.  BankInvest Basis

BankInvest Optima

Risk-Adjusted Performance

Very Weak

Over the last 90 days BankInvest Optima 75 has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, BankInvest Optima is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

BankInvest Basis

Risk-Adjusted Performance

Very Weak

Over the last 90 days BankInvest Basis has generated negative risk-adjusted returns adding no value to fund investors. Despite quite persistent forward indicators, BankInvest Basis is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with BankInvest Optima and BankInvest Basis

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

The idea behind BankInvest Optima 75 and BankInvest Basis 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.