Correlation Between G2D Investments and British American
Can any of the company-specific risk be diversified away by investing in both G2D Investments and British American 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 G2D Investments and British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G2D Investments and British American Tobacco, you can compare the effects of market volatilities on G2D Investments and British American 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 G2D Investments with a short position of British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of G2D Investments and British American.
Diversification Opportunities for G2D Investments and British American
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between G2D and British is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding G2D Investments and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco and G2D Investments 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 G2D Investments are associated (or correlated) with British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of G2D Investments i.e., G2D Investments and British American go up and down completely randomly.
Pair Corralation between G2D Investments and British American
Assuming the 90 days trading horizon G2D Investments is expected to under-perform the British American. In addition to that, G2D Investments is 2.04 times more volatile than British American Tobacco. It trades about -0.12 of its total potential returns per unit of risk. British American Tobacco is currently generating about 0.09 per unit of volatility. If you would invest 4,231 in British American Tobacco on September 6, 2024 and sell it today you would earn a total of 276.00 from holding British American Tobacco or generate 6.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
G2D Investments vs. British American Tobacco
Performance |
Timeline |
G2D Investments |
British American Tobacco |
G2D Investments and British American Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with G2D Investments and British American
The main advantage of trading using opposite G2D Investments and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G2D Investments position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.G2D Investments vs. Electronic Arts | G2D Investments vs. Deutsche Bank Aktiengesellschaft | G2D Investments vs. Sumitomo Mitsui Financial | G2D Investments vs. The Home Depot |
British American vs. Bio Techne | British American vs. Uber Technologies | British American vs. Brpr Corporate Offices | British American vs. Paycom Software |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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