Correlation Between Trainline Plc and Batm Advanced

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

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

Diversification Opportunities for Trainline Plc and Batm Advanced

-0.08

Correlation Coefficient

Trainline Plc  Batm Advanced

Good diversification

The 3 months correlation between Trainline and Batm is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Trainline Plc 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 Trainline Plc 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 Trainline Plc 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 Trainline Plc i.e., Trainline Plc and Batm Advanced go up and down completely randomly.

Pair Corralation between Trainline Plc and Batm Advanced

Assuming the 90 days trading horizon Trainline Plc is expected to under-perform the Batm Advanced. In addition to that, Trainline Plc is 1.1 times more volatile than Batm Advanced Communications. It trades about -0.16 of its total potential returns per unit of risk. Batm Advanced Communications is currently generating about -0.05 per unit of volatility. If you would invest  1,920  in Batm Advanced Communications on October 22, 2024 and sell it today you would lose (37.00) from holding Batm Advanced Communications or give up 1.93% of portfolio value over 90 days.

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

Trainline Plc  vs.  Batm Advanced Communications

Trainline Plc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trainline Plc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Trainline Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Batm Advanced Commun

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Batm Advanced Communications are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Batm Advanced may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Trainline Plc and Batm Advanced

The main advantage of trading using opposite Trainline Plc and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trainline Plc 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 Trainline Plc 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.