Correlation Between Batm Advanced and Triad Group

Can any of the company-specific risk be diversified away by investing in both Batm Advanced and Triad Group 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 Triad Group 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 Triad Group PLC, you can compare the effects of market volatilities on Batm Advanced and Triad Group 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 Triad Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Triad Group.

Diversification Opportunities for Batm Advanced and Triad Group

-0.08

Correlation Coefficient

Batm Advanced  Triad Group

Good diversification

The 3 months correlation between Batm and Triad is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Triad Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triad Group PLC 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 Triad Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triad Group PLC has no effect on the direction of Batm Advanced i.e., Batm Advanced and Triad Group go up and down completely randomly.

Pair Corralation between Batm Advanced and Triad Group

Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the Triad Group. In addition to that, Batm Advanced is 1.15 times more volatile than Triad Group PLC. It trades about -0.01 of its total potential returns per unit of risk. Triad Group PLC is currently generating about 0.12 per unit of volatility. If you would invest  12,080  in Triad Group PLC on October 6, 2024 and sell it today you would earn a total of  15,420  from holding Triad Group PLC or generate 127.65% return on investment over 90 days.

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

Batm Advanced Communications  vs.  Triad Group PLC

Batm Advanced Commun

Risk-Adjusted Performance

0 of 100

Very Weak

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

Triad Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Batm Advanced and Triad Group

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

The idea behind Batm Advanced Communications and Triad Group 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.