Correlation Between Sahamit Machinery and BA Airport

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

By analyzing existing cross correlation between Sahamit Machinery Public and BA Airport Leasehold, you can compare the effects of market volatilities on Sahamit Machinery and BA Airport 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 Sahamit Machinery with a short position of BA Airport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sahamit Machinery and BA Airport.

Diversification Opportunities for Sahamit Machinery and BA Airport

0.06

Correlation Coefficient

Sahamit Machinery  BA Airport

Significant diversification

The 3 months correlation between Sahamit and BAREIT is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sahamit Machinery Public and BA Airport Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BA Airport Leasehold and Sahamit Machinery 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 Sahamit Machinery Public are associated (or correlated) with BA Airport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BA Airport Leasehold has no effect on the direction of Sahamit Machinery i.e., Sahamit Machinery and BA Airport go up and down completely randomly.

Pair Corralation between Sahamit Machinery and BA Airport

Assuming the 90 days trading horizon Sahamit Machinery Public is expected to under-perform the BA Airport. In addition to that, Sahamit Machinery is 1.38 times more volatile than BA Airport Leasehold. It trades about 0.0 of its total potential returns per unit of risk. BA Airport Leasehold is currently generating about 0.02 per unit of volatility. If you would invest  921.00  in BA Airport Leasehold on December 29, 2024 and sell it today you would earn a total of  9.00  from holding BA Airport Leasehold or generate 0.98% return on investment over 90 days.

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

Sahamit Machinery Public  vs.  BA Airport Leasehold

Sahamit Machinery Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sahamit Machinery Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Sahamit Machinery is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

BA Airport Leasehold

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BA Airport Leasehold are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BA Airport is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sahamit Machinery and BA Airport

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

The idea behind Sahamit Machinery Public and BA Airport Leasehold 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.