Correlation Between Hiscox and Batm Advanced

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

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

Diversification Opportunities for Hiscox and Batm Advanced

0.75

Correlation Coefficient

Hiscox  Batm Advanced

Poor diversification

The 3 months correlation between Hiscox and Batm is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hiscox 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 Hiscox 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 Hiscox 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 Hiscox i.e., Hiscox and Batm Advanced go up and down completely randomly.

Pair Corralation between Hiscox and Batm Advanced

Assuming the 90 days trading horizon Hiscox is expected to generate 1.13 times less return on investment than Batm Advanced. But when comparing it to its historical volatility, Hiscox is 1.83 times less risky than Batm Advanced. It trades about 0.14 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,375  in Batm Advanced Communications on April 22, 2025 and sell it today you would earn a total of  183.00  from holding Batm Advanced Communications or generate 13.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Hiscox  vs.  Batm Advanced Communications

Hiscox

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hiscox are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Hiscox exhibited solid returns over the last few months and may actually be approaching a breakup point.

Batm Advanced Commun

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Batm Advanced Communications are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Batm Advanced exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hiscox and Batm Advanced

The main advantage of trading using opposite Hiscox and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hiscox 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 Hiscox 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.