Correlation Between BBB Foods and Awaysis Capital

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

By analyzing existing cross correlation between BBB Foods and Awaysis Capital, you can compare the effects of market volatilities on BBB Foods and Awaysis Capital 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 BBB Foods with a short position of Awaysis Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBB Foods and Awaysis Capital.

Diversification Opportunities for BBB Foods and Awaysis Capital

-0.04

Correlation Coefficient

BBB Foods  Awaysis Capital

Good diversification

The 3 months correlation between BBB and Awaysis is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding BBB Foods and Awaysis Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awaysis Capital and BBB Foods 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 BBB Foods are associated (or correlated) with Awaysis Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awaysis Capital has no effect on the direction of BBB Foods i.e., BBB Foods and Awaysis Capital go up and down completely randomly.

Pair Corralation between BBB Foods and Awaysis Capital

Given the investment horizon of 90 days BBB Foods is expected to generate 0.24 times more return on investment than Awaysis Capital. However, BBB Foods is 4.09 times less risky than Awaysis Capital. It trades about 0.0 of its potential returns per unit of risk. Awaysis Capital is currently generating about 0.0 per unit of risk. If you would invest  2,936  in BBB Foods on September 5, 2024 and sell it today you would lose (78.00) from holding BBB Foods or give up 2.66% of portfolio value over 90 days.

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

BBB Foods  vs.  Awaysis Capital

BBB Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BBB Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, BBB Foods is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Awaysis Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Awaysis Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Awaysis Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BBB Foods and Awaysis Capital

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

The idea behind BBB Foods and Awaysis Capital 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.