Correlation Between Bill and 50247VAB5

Can any of the company-specific risk be diversified away by investing in both Bill and 50247VAB5 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 Bill and 50247VAB5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bill Com Holdings and LYB INTL FIN, you can compare the effects of market volatilities on Bill and 50247VAB5 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 Bill with a short position of 50247VAB5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bill and 50247VAB5.

Diversification Opportunities for Bill and 50247VAB5

-0.42

Correlation Coefficient

Bill  50247VAB5

Very good diversification

The 3 months correlation between Bill and 50247VAB5 is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bill Com Holdings and LYB INTL FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYB INTL FIN and Bill 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 Bill Com Holdings are associated (or correlated) with 50247VAB5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYB INTL FIN has no effect on the direction of Bill i.e., Bill and 50247VAB5 go up and down completely randomly.

Pair Corralation between Bill and 50247VAB5

Given the investment horizon of 90 days Bill Com Holdings is expected to generate 2.35 times more return on investment than 50247VAB5. However, Bill is 2.35 times more volatile than LYB INTL FIN. It trades about 0.24 of its potential returns per unit of risk. LYB INTL FIN is currently generating about -0.11 per unit of risk. If you would invest  5,473  in Bill Com Holdings on October 9, 2024 and sell it today you would earn a total of  3,277  from holding Bill Com Holdings or generate 59.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.16%
Values	Daily Returns

Bill Com Holdings  vs.  LYB INTL FIN

Bill Com Holdings

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bill Com Holdings are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Bill disclosed solid returns over the last few months and may actually be approaching a breakup point.

LYB INTL FIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LYB INTL FIN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for LYB INTL FIN investors.

Pair Trading with Bill and 50247VAB5

The main advantage of trading using opposite Bill and 50247VAB5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bill position performs unexpectedly, 50247VAB5 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 50247VAB5 will offset losses from the drop in 50247VAB5's long position.

The idea behind Bill Com Holdings and LYB INTL FIN 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..