Correlation Between Adgar Investments and Batm Advanced

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

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

Diversification Opportunities for Adgar Investments and Batm Advanced

0.51

Correlation Coefficient

Adgar Investments  Batm Advanced

Very weak diversification

The 3 months correlation between Adgar and Batm is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Adgar Investments and 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 Adgar 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 Adgar Investments and 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 Adgar Investments i.e., Adgar Investments and Batm Advanced go up and down completely randomly.

Pair Corralation between Adgar Investments and Batm Advanced

Assuming the 90 days trading horizon Adgar Investments and is expected to under-perform the Batm Advanced. In addition to that, Adgar Investments is 1.02 times more volatile than Batm Advanced Communications. It trades about -0.02 of its total potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.09 per unit of volatility. If you would invest  8,880  in Batm Advanced Communications on July 6, 2024 and sell it today you would earn a total of  1,450  from holding Batm Advanced Communications or generate 16.33% return on investment over 90 days.

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

Adgar Investments and  vs.  Batm Advanced Communications

Adgar Investments

Risk-Adjusted Performance

1 of 100

Weak

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

Batm Advanced Commun

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Batm Advanced Communications are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Batm Advanced sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adgar Investments and Batm Advanced

The main advantage of trading using opposite Adgar Investments and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adgar Investments 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 Adgar Investments and 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.