Correlation Between Vale SA and Batm Advanced

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

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

Diversification Opportunities for Vale SA and Batm Advanced

-0.22

Correlation Coefficient

Vale SA  Batm Advanced

Very good diversification

The 3 months correlation between Vale and Batm is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Vale SA ADR 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 Vale SA 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 Vale SA ADR 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 Vale SA i.e., Vale SA and Batm Advanced go up and down completely randomly.

Pair Corralation between Vale SA and Batm Advanced

Given the investment horizon of 90 days Vale SA is expected to generate 1.24 times less return on investment than Batm Advanced. But when comparing it to its historical volatility, Vale SA ADR is 1.49 times less risky than Batm Advanced. It trades about 0.05 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  7,090  in Batm Advanced Communications on May 5, 2025 and sell it today you would earn a total of  250.00  from holding Batm Advanced Communications or generate 3.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	82.54%
Values	Daily Returns

Vale SA ADR  vs.  Batm Advanced Communications

Vale SA ADR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vale SA ADR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Vale SA is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Batm Advanced Commun

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Batm Advanced Communications are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Batm Advanced may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Vale SA and Batm Advanced

The main advantage of trading using opposite Vale SA and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vale SA 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 Vale SA ADR 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.