Correlation Between Batm Advanced and River

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

By analyzing existing cross correlation between Batm Advanced Communications and River and Mercantile, you can compare the effects of market volatilities on Batm Advanced and River 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 Batm Advanced with a short position of River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and River.

Diversification Opportunities for Batm Advanced and River

0.07

Correlation Coefficient

Batm Advanced  River

Significant diversification

The 3 months correlation between Batm and River is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and River and Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River and Mercantile and Batm Advanced 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 Batm Advanced Communications are associated (or correlated) with River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River and Mercantile has no effect on the direction of Batm Advanced i.e., Batm Advanced and River go up and down completely randomly.

Pair Corralation between Batm Advanced and River

Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the River. In addition to that, Batm Advanced is 9.1 times more volatile than River and Mercantile. It trades about -0.05 of its total potential returns per unit of risk. River and Mercantile is currently generating about -0.15 per unit of volatility. If you would invest  17,750  in River and Mercantile on October 22, 2024 and sell it today you would lose (100.00) from holding River and Mercantile or give up 0.56% of portfolio value over 90 days.

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

Batm Advanced Communications  vs.  River and Mercantile

Batm Advanced Commun

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Batm Advanced Communications are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Batm Advanced may actually be approaching a critical reversion point that can send shares even higher in February 2025.

River and Mercantile

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in River and Mercantile are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, River is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Batm Advanced and River

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

The idea behind Batm Advanced Communications and River and Mercantile 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.