Correlation Between Advanced Braking and BTC Health
Can any of the company-specific risk be diversified away by investing in both Advanced Braking and BTC Health 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 Advanced Braking and BTC Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Braking Technology and BTC Health Limited, you can compare the effects of market volatilities on Advanced Braking and BTC Health 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 Advanced Braking with a short position of BTC Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Braking and BTC Health.
Diversification Opportunities for Advanced Braking and BTC Health
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advanced and BTC is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Braking Technology and BTC Health Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTC Health Limited and Advanced Braking 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 Advanced Braking Technology are associated (or correlated) with BTC Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTC Health Limited has no effect on the direction of Advanced Braking i.e., Advanced Braking and BTC Health go up and down completely randomly.
Pair Corralation between Advanced Braking and BTC Health
Assuming the 90 days trading horizon Advanced Braking is expected to generate 13.52 times less return on investment than BTC Health. But when comparing it to its historical volatility, Advanced Braking Technology is 2.03 times less risky than BTC Health. It trades about 0.04 of its potential returns per unit of risk. BTC Health Limited is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 5.90 in BTC Health Limited on October 11, 2024 and sell it today you would earn a total of 1.50 from holding BTC Health Limited or generate 25.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Advanced Braking Technology vs. BTC Health Limited
Performance |
| Timeline |
| Advanced Braking Tec |
| BTC Health Limited |
Advanced Braking and BTC Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Braking and BTC Health
The main advantage of trading using opposite Advanced Braking and BTC Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Braking position performs unexpectedly, BTC Health 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 BTC Health will offset losses from the drop in BTC Health's long position.| Advanced Braking vs. Australian Agricultural | Advanced Braking vs. Pinnacle Investment Management | Advanced Braking vs. Spirit Telecom | Advanced Braking vs. Microequities Asset Management |
| BTC Health vs. Neurotech International | BTC Health vs. Retail Food Group | BTC Health vs. Charter Hall Retail | BTC Health vs. Zoom2u Technologies |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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