Correlation Between Ampol and BTC Health
Can any of the company-specific risk be diversified away by investing in both Ampol 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 Ampol and BTC Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampol and BTC Health Limited, you can compare the effects of market volatilities on Ampol 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 Ampol with a short position of BTC Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampol and BTC Health.
Diversification Opportunities for Ampol and BTC Health
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ampol and BTC is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ampol 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 Ampol 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 Ampol 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 Ampol i.e., Ampol and BTC Health go up and down completely randomly.
Pair Corralation between Ampol and BTC Health
Assuming the 90 days trading horizon Ampol is expected to generate 10.34 times less return on investment than BTC Health. But when comparing it to its historical volatility, Ampol is 4.24 times less risky than BTC Health. It trades about 0.02 of its potential returns per unit of risk. BTC Health Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.60 in BTC Health Limited on September 14, 2024 and sell it today you would earn a total of 3.10 from holding BTC Health Limited or generate 86.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ampol vs. BTC Health Limited
Performance |
| Timeline |
| Ampol |
| BTC Health Limited |
Ampol and BTC Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampol and BTC Health
The main advantage of trading using opposite Ampol and BTC Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampol 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.| Ampol vs. BTC Health Limited | Ampol vs. Falcon Metals | Ampol vs. Dalaroo Metals | Ampol vs. Event Hospitality and |
| BTC Health vs. Talisman Mining | BTC Health vs. Red Hill Iron | BTC Health vs. M3 Mining | BTC Health vs. Chalice Mining Limited |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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