Correlation Between Rimon Consulting and Batm Advanced

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

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

Diversification Opportunities for Rimon Consulting and Batm Advanced

0.71

Correlation Coefficient

Rimon Consulting  Batm Advanced

Poor diversification

The 3 months correlation between Rimon and Batm is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Rimon Consulting Management and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun and Rimon Consulting 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 Rimon Consulting Management are associated (or correlated) with Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of Rimon Consulting i.e., Rimon Consulting and Batm Advanced go up and down completely randomly.

Pair Corralation between Rimon Consulting and Batm Advanced

Assuming the 90 days trading horizon Rimon Consulting Management is expected to generate 1.24 times more return on investment than Batm Advanced. However, Rimon Consulting is 1.24 times more volatile than Batm Advanced Communications. It trades about -0.06 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about -0.2 per unit of risk. If you would invest  426,900  in Rimon Consulting Management on December 29, 2024 and sell it today you would lose (39,100) from holding Rimon Consulting Management or give up 9.16% of portfolio value over 90 days.

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

Rimon Consulting Management  vs.  Batm Advanced Communications

Rimon Consulting Man

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rimon Consulting Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Batm Advanced Commun

Risk-Adjusted Performance

Very Weak

Over the last 90 days Batm Advanced Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Rimon Consulting and Batm Advanced

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

The idea behind Rimon Consulting Management and Batm Advanced Communications 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.