Correlation Between BRIT AMER and CHRYSALIS INVESTMENTS

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

By analyzing existing cross correlation between BRIT AMER TOBACCO and CHRYSALIS INVESTMENTS LTD, you can compare the effects of market volatilities on BRIT AMER and CHRYSALIS INVESTMENTS 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 BRIT AMER with a short position of CHRYSALIS INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRIT AMER and CHRYSALIS INVESTMENTS.

Diversification Opportunities for BRIT AMER and CHRYSALIS INVESTMENTS

-0.02

Correlation Coefficient

BRIT AMER  CHRYSALIS INVESTMENTS

Good diversification

The 3 months correlation between BRIT and CHRYSALIS is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding BRIT AMER TOBACCO and CHRYSALIS INVESTMENTS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHRYSALIS INVESTMENTS LTD and BRIT AMER 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 BRIT AMER TOBACCO are associated (or correlated) with CHRYSALIS INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHRYSALIS INVESTMENTS LTD has no effect on the direction of BRIT AMER i.e., BRIT AMER and CHRYSALIS INVESTMENTS go up and down completely randomly.

Pair Corralation between BRIT AMER and CHRYSALIS INVESTMENTS

Assuming the 90 days trading horizon BRIT AMER TOBACCO is expected to generate 0.81 times more return on investment than CHRYSALIS INVESTMENTS. However, BRIT AMER TOBACCO is 1.23 times less risky than CHRYSALIS INVESTMENTS. It trades about 0.09 of its potential returns per unit of risk. CHRYSALIS INVESTMENTS LTD is currently generating about -0.01 per unit of risk. If you would invest  3,455  in BRIT AMER TOBACCO on December 23, 2024 and sell it today you would earn a total of  301.00  from holding BRIT AMER TOBACCO or generate 8.71% return on investment over 90 days.

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

BRIT AMER TOBACCO  vs.  CHRYSALIS INVESTMENTS LTD

BRIT AMER TOBACCO

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BRIT AMER TOBACCO are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BRIT AMER may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CHRYSALIS INVESTMENTS LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHRYSALIS INVESTMENTS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CHRYSALIS INVESTMENTS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BRIT AMER and CHRYSALIS INVESTMENTS

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

The idea behind BRIT AMER TOBACCO and CHRYSALIS INVESTMENTS LTD 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.