Correlation Between Bt Brands and Inception Growth

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

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

Diversification Opportunities for Bt Brands and Inception Growth

-0.42

Correlation Coefficient

Bt Brands  Inception Growth

Very good diversification

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

Pair Corralation between Bt Brands and Inception Growth

Given the investment horizon of 90 days Bt Brands is expected to generate 4.69 times more return on investment than Inception Growth. However, Bt Brands is 4.69 times more volatile than Inception Growth Acquisition. It trades about 0.02 of its potential returns per unit of risk. Inception Growth Acquisition is currently generating about 0.04 per unit of risk. If you would invest  181.00  in Bt Brands on October 5, 2024 and sell it today you would lose (37.00) from holding Bt Brands or give up 20.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Bt Brands  vs.  Inception Growth Acquisition

Bt Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bt Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Bt Brands is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Inception Growth Acq

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inception Growth Acquisition are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Inception Growth may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bt Brands and Inception Growth

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

The idea behind Bt Brands and Inception Growth Acquisition 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.