Correlation Between BigBearai Holdings and Advantest

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

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

Diversification Opportunities for BigBearai Holdings and Advantest

0.65

Correlation Coefficient

BigBearai Holdings  Advantest

Poor diversification

The 3 months correlation between BigBearai and Advantest is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and Advantest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantest and BigBearai Holdings 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 BigBearai Holdings are associated (or correlated) with Advantest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantest has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and Advantest go up and down completely randomly.

Pair Corralation between BigBearai Holdings and Advantest

Given the investment horizon of 90 days BigBearai Holdings is expected to generate 2.59 times more return on investment than Advantest. However, BigBearai Holdings is 2.59 times more volatile than Advantest. It trades about 0.14 of its potential returns per unit of risk. Advantest is currently generating about 0.21 per unit of risk. If you would invest  156.00  in BigBearai Holdings on September 18, 2024 and sell it today you would earn a total of  96.00  from holding BigBearai Holdings or generate 61.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

BigBearai Holdings  vs.  Advantest

BigBearai Holdings

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BigBearai Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, BigBearai Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Advantest

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Advantest are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Advantest reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BigBearai Holdings and Advantest

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

The idea behind BigBearai Holdings and Advantest 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.