Correlation Between Batero Gold and Bird Construction

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

By analyzing existing cross correlation between Batero Gold Corp and Bird Construction, you can compare the effects of market volatilities on Batero Gold and Bird Construction 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 Batero Gold with a short position of Bird Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batero Gold and Bird Construction.

Diversification Opportunities for Batero Gold and Bird Construction

0.88

Correlation Coefficient

Batero Gold  Bird Construction

Very poor diversification

The 3 months correlation between Batero and Bird is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Batero Gold Corp and Bird Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bird Construction and Batero Gold 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 Batero Gold Corp are associated (or correlated) with Bird Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bird Construction has no effect on the direction of Batero Gold i.e., Batero Gold and Bird Construction go up and down completely randomly.

Pair Corralation between Batero Gold and Bird Construction

Assuming the 90 days horizon Batero Gold Corp is expected to generate 4.08 times more return on investment than Bird Construction. However, Batero Gold is 4.08 times more volatile than Bird Construction. It trades about -0.04 of its potential returns per unit of risk. Bird Construction is currently generating about -0.17 per unit of risk. If you would invest  5.00  in Batero Gold Corp on October 22, 2024 and sell it today you would lose (2.00) from holding Batero Gold Corp or give up 40.0% of portfolio value over 90 days.

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

Batero Gold Corp  vs.  Bird Construction

Batero Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Bird Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bird Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Batero Gold and Bird Construction

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

The idea behind Batero Gold Corp and Bird Construction 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.