Correlation Between Bts Tactical and Bts Enhanced

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

By analyzing existing cross correlation between Bts Tactical Fixed and Bts Enhanced Equity, you can compare the effects of market volatilities on Bts Tactical and Bts Enhanced 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 Bts Tactical with a short position of Bts Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bts Tactical and Bts Enhanced.

Diversification Opportunities for Bts Tactical and Bts Enhanced

0.88

Correlation Coefficient

Bts Tactical  Bts Enhanced

Very poor diversification

The 3 months correlation between Bts and Bts is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bts Tactical Fixed and Bts Enhanced Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bts Enhanced Equity and Bts Tactical 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 Bts Tactical Fixed are associated (or correlated) with Bts Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bts Enhanced Equity has no effect on the direction of Bts Tactical i.e., Bts Tactical and Bts Enhanced go up and down completely randomly.

Pair Corralation between Bts Tactical and Bts Enhanced

Assuming the 90 days horizon Bts Tactical Fixed is expected to under-perform the Bts Enhanced. But the mutual fund apears to be less risky and, when comparing its historical volatility, Bts Tactical Fixed is 1.87 times less risky than Bts Enhanced. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Bts Enhanced Equity is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,024  in Bts Enhanced Equity on August 1, 2025 and sell it today you would lose (3.00) from holding Bts Enhanced Equity or give up 0.29% of portfolio value over 90 days.

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

Bts Tactical Fixed  vs.  Bts Enhanced Equity

Bts Tactical Fixed

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Bts Tactical Fixed are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Bts Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bts Enhanced Equity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bts Enhanced Equity are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Bts Enhanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bts Tactical and Bts Enhanced

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

The idea behind Bts Tactical Fixed and Bts Enhanced Equity 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.