Correlation Between Bankers Investment and Athelney Trust

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

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

Diversification Opportunities for Bankers Investment and Athelney Trust

0.71

Correlation Coefficient

Bankers Investment  Athelney Trust

Poor diversification

The 3 months correlation between Bankers and Athelney is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust and Athelney Trust plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athelney Trust plc and Bankers Investment 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 Bankers Investment Trust are associated (or correlated) with Athelney Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athelney Trust plc has no effect on the direction of Bankers Investment i.e., Bankers Investment and Athelney Trust go up and down completely randomly.

Pair Corralation between Bankers Investment and Athelney Trust

Assuming the 90 days trading horizon Bankers Investment Trust is expected to under-perform the Athelney Trust. But the stock apears to be less risky and, when comparing its historical volatility, Bankers Investment Trust is 2.09 times less risky than Athelney Trust. The stock trades about -0.01 of its potential returns per unit of risk. The Athelney Trust plc is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  17,500  in Athelney Trust plc on October 8, 2024 and sell it today you would earn a total of  1,000.00  from holding Athelney Trust plc or generate 5.71% return on investment over 90 days.

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

Bankers Investment Trust  vs.  Athelney Trust plc

Bankers Investment Trust

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bankers Investment Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bankers Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Athelney Trust plc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Athelney Trust plc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Athelney Trust may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bankers Investment and Athelney Trust

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

The idea behind Bankers Investment Trust and Athelney Trust plc 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.