Correlation Between ACDC Metals and BTC Health
Can any of the company-specific risk be diversified away by investing in both ACDC Metals 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 ACDC Metals and BTC Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACDC Metals and BTC Health Limited, you can compare the effects of market volatilities on ACDC Metals 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 ACDC Metals with a short position of BTC Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACDC Metals and BTC Health.
Diversification Opportunities for ACDC Metals and BTC Health
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ACDC and BTC is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ACDC Metals 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 ACDC Metals 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 ACDC Metals 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 ACDC Metals i.e., ACDC Metals and BTC Health go up and down completely randomly.
Pair Corralation between ACDC Metals and BTC Health
Assuming the 90 days trading horizon ACDC Metals is expected to under-perform the BTC Health. But the stock apears to be less risky and, when comparing its historical volatility, ACDC Metals is 1.68 times less risky than BTC Health. The stock trades about -0.33 of its potential returns per unit of risk. The BTC Health Limited is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 6.50 in BTC Health Limited on August 30, 2024 and sell it today you would lose (1.00) from holding BTC Health Limited or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACDC Metals vs. BTC Health Limited
Performance |
| Timeline |
| ACDC Metals |
| BTC Health Limited |
ACDC Metals and BTC Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACDC Metals and BTC Health
The main advantage of trading using opposite ACDC Metals and BTC Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACDC Metals 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.| ACDC Metals vs. Northern Star Resources | ACDC Metals vs. Evolution Mining | ACDC Metals vs. Bluescope Steel | ACDC Metals vs. Sandfire Resources NL |
| BTC Health vs. Tombador Iron | BTC Health vs. COAST ENTERTAINMENT HOLDINGS | BTC Health vs. Autosports Group | BTC Health vs. Ironbark Capital |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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