Correlation Between Asara Resources and BTC Health
Can any of the company-specific risk be diversified away by investing in both Asara Resources 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 Asara Resources and BTC Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asara Resources and BTC Health Limited, you can compare the effects of market volatilities on Asara Resources 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 Asara Resources with a short position of BTC Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asara Resources and BTC Health.
Diversification Opportunities for Asara Resources and BTC Health
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asara and BTC is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Asara Resources 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 Asara Resources 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 Asara Resources 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 Asara Resources i.e., Asara Resources and BTC Health go up and down completely randomly.
Pair Corralation between Asara Resources and BTC Health
Assuming the 90 days trading horizon Asara Resources is expected to generate 1.78 times less return on investment than BTC Health. In addition to that, Asara Resources is 1.16 times more volatile than BTC Health Limited. It trades about 0.02 of its total potential returns per unit of risk. BTC Health Limited is currently generating about 0.04 per unit of volatility. If you would invest 3.70 in BTC Health Limited on August 31, 2024 and sell it today you would earn a total of 2.00 from holding BTC Health Limited or generate 54.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asara Resources vs. BTC Health Limited
Performance |
| Timeline |
| Asara Resources |
| BTC Health Limited |
Asara Resources and BTC Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asara Resources and BTC Health
The main advantage of trading using opposite Asara Resources and BTC Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asara Resources 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.| Asara Resources vs. Ras Technology Holdings | Asara Resources vs. G8 Education | Asara Resources vs. Perseus Mining | Asara Resources vs. Viva Leisure |
| BTC Health vs. Alternative Investment Trust | BTC Health vs. IDP Education | BTC Health vs. Sandon Capital Investments | BTC Health vs. EMvision Medical Devices |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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