Correlation Between British Amer and PCB Tec
Can any of the company-specific risk be diversified away by investing in both British Amer and PCB Tec 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 British Amer and PCB Tec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and PCB Tec, you can compare the effects of market volatilities on British Amer and PCB Tec 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 British Amer with a short position of PCB Tec. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and PCB Tec.
Diversification Opportunities for British Amer and PCB Tec
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between British and PCB is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and PCB Tec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCB Tec and British Amer 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 British American Tobacco are associated (or correlated) with PCB Tec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCB Tec has no effect on the direction of British Amer i.e., British Amer and PCB Tec go up and down completely randomly.
Pair Corralation between British Amer and PCB Tec
Considering the 90-day investment horizon British American Tobacco is expected to generate 0.35 times more return on investment than PCB Tec. However, British American Tobacco is 2.85 times less risky than PCB Tec. It trades about 0.03 of its potential returns per unit of risk. PCB Tec is currently generating about -0.07 per unit of risk. If you would invest 3,019 in British American Tobacco on February 11, 2024 and sell it today you would earn a total of 48.00 from holding British American Tobacco or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.78% |
| Values | Daily Returns |
British American Tobacco vs. PCB Tec
Performance |
| Timeline |
| British American Tobacco |
| PCB Tec |
British Amer and PCB Tec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and PCB Tec
The main advantage of trading using opposite British Amer and PCB Tec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, PCB Tec 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 PCB Tec will offset losses from the drop in PCB Tec's long position.| British Amer vs. Universal | British Amer vs. Imperial Brands PLC | British Amer vs. Japan Tobacco ADR | British Amer vs. Imperial Brands PLC |
Check out your portfolio center.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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |