Correlation Between BTB Real and 126650BR0

Can any of the company-specific risk be diversified away by investing in both BTB Real and 126650BR0 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 BTB Real and 126650BR0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BTB Real Estate and CVS HEALTH P, you can compare the effects of market volatilities on BTB Real and 126650BR0 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 BTB Real with a short position of 126650BR0. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTB Real and 126650BR0.

Diversification Opportunities for BTB Real and 126650BR0

0.42

Correlation Coefficient

BTB Real  126650BR0

Very weak diversification

The 3 months correlation between BTB and 126650BR0 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding BTB Real Estate and CVS HEALTH P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVS HEALTH P and BTB Real 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 BTB Real Estate are associated (or correlated) with 126650BR0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVS HEALTH P has no effect on the direction of BTB Real i.e., BTB Real and 126650BR0 go up and down completely randomly.

Pair Corralation between BTB Real and 126650BR0

Assuming the 90 days horizon BTB Real Estate is expected to under-perform the 126650BR0. In addition to that, BTB Real is 1.02 times more volatile than CVS HEALTH P. It trades about -0.17 of its total potential returns per unit of risk. CVS HEALTH P is currently generating about 0.04 per unit of volatility. If you would invest  10,224  in CVS HEALTH P on November 29, 2024 and sell it today you would earn a total of  218.00  from holding CVS HEALTH P or generate 2.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	72.88%
Values	Daily Returns

BTB Real Estate  vs.  CVS HEALTH P

BTB Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days BTB Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

CVS HEALTH P

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CVS HEALTH P are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 126650BR0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BTB Real and 126650BR0

The main advantage of trading using opposite BTB Real and 126650BR0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTB Real position performs unexpectedly, 126650BR0 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 126650BR0 will offset losses from the drop in 126650BR0's long position.

The idea behind BTB Real Estate and CVS HEALTH P 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.