Correlation Between Atlanta Braves and 3M

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Can any of the company-specific risk be diversified away by investing in both Atlanta Braves and 3M 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 Atlanta Braves and 3M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlanta Braves Holdings and 3M Company, you can compare the effects of market volatilities on Atlanta Braves and 3M 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 Atlanta Braves with a short position of 3M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlanta Braves and 3M.

Diversification Opportunities for Atlanta Braves and 3M

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between Atlanta and 3M is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Atlanta Braves Holdings and 3M Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M Company and Atlanta Braves 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 Atlanta Braves Holdings are associated (or correlated) with 3M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M Company has no effect on the direction of Atlanta Braves i.e., Atlanta Braves and 3M go up and down completely randomly.

Pair Corralation between Atlanta Braves and 3M

Assuming the 90 days horizon Atlanta Braves Holdings is expected to under-perform the 3M. But the stock apears to be less risky and, when comparing its historical volatility, Atlanta Braves Holdings is 2.15 times less risky than 3M. The stock trades about -0.11 of its potential returns per unit of risk. The 3M Company is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  9,230  in 3M Company on December 29, 2023 and sell it today you would earn a total of  1,229  from holding 3M Company or generate 13.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Atlanta Braves Holdings  vs.  3M Company

 Performance 
       Timeline  
Atlanta Braves Holdings 

Risk-Adjusted Performance

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High
Very Weak
Over the last 90 days Atlanta Braves Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Atlanta Braves is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
3M Company 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days 3M Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, 3M is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Atlanta Braves and 3M Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Atlanta Braves and 3M

The main advantage of trading using opposite Atlanta Braves and 3M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlanta Braves position performs unexpectedly, 3M 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 3M will offset losses from the drop in 3M's long position.
The idea behind Atlanta Braves Holdings and 3M Company 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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