Correlation Between Roku and BT Group
Can any of the company-specific risk be diversified away by investing in both Roku and BT Group 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 Roku and BT Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roku Inc and BT Group Plc, you can compare the effects of market volatilities on Roku and BT Group 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 Roku with a short position of BT Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and BT Group.
Diversification Opportunities for Roku and BT Group
Pay attention - limited upside
The 3 months correlation between Roku and BT Group is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and BT Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BT Group Plc and Roku 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 Roku Inc are associated (or correlated) with BT Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BT Group Plc has no effect on the direction of Roku i.e., Roku and BT Group go up and down completely randomly.
Pair Corralation between Roku and BT Group
If you would invest (100.00) in BT Group Plc on January 20, 2024 and sell it today you would earn a total of 100.00 from holding BT Group Plc or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Roku Inc vs. BT Group Plc
Performance |
Timeline |
Roku Inc |
BT Group Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Roku and BT Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Roku and BT Group
The main advantage of trading using opposite Roku and BT Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku position performs unexpectedly, BT Group 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 BT Group will offset losses from the drop in BT Group's long position.The idea behind Roku Inc and BT Group Plc 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.BT Group vs. Aegon NV ADR | BT Group vs. Tandem Diabetes Care | BT Group vs. Alternative Investment | BT Group vs. Comstock Holding Companies |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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