Correlation Between Birchtech Corp and Alaska Hydro
Can any of the company-specific risk be diversified away by investing in both Birchtech Corp and Alaska Hydro 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 Birchtech Corp and Alaska Hydro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Birchtech Corp and Alaska Hydro, you can compare the effects of market volatilities on Birchtech Corp and Alaska Hydro 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 Birchtech Corp with a short position of Alaska Hydro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birchtech Corp and Alaska Hydro.
Diversification Opportunities for Birchtech Corp and Alaska Hydro
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Birchtech and Alaska is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Birchtech Corp and Alaska Hydro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Hydro and Birchtech Corp 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 Birchtech Corp are associated (or correlated) with Alaska Hydro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Hydro has no effect on the direction of Birchtech Corp i.e., Birchtech Corp and Alaska Hydro go up and down completely randomly.
Pair Corralation between Birchtech Corp and Alaska Hydro
Assuming the 90 days trading horizon Birchtech Corp is expected to under-perform the Alaska Hydro. But the stock apears to be less risky and, when comparing its historical volatility, Birchtech Corp is 4.88 times less risky than Alaska Hydro. The stock trades about -0.11 of its potential returns per unit of risk. The Alaska Hydro is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.50 in Alaska Hydro on September 4, 2024 and sell it today you would lose (0.50) from holding Alaska Hydro or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 6.19% |
| Values | Daily Returns |
Birchtech Corp vs. Alaska Hydro
Performance |
| Timeline |
| Birchtech Corp |
| Alaska Hydro |
Birchtech Corp and Alaska Hydro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Birchtech Corp and Alaska Hydro
The main advantage of trading using opposite Birchtech Corp and Alaska Hydro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birchtech Corp position performs unexpectedly, Alaska Hydro 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 Alaska Hydro will offset losses from the drop in Alaska Hydro's long position.| Birchtech Corp vs. Slate Grocery REIT | Birchtech Corp vs. Western Copper and | Birchtech Corp vs. Advent Wireless | Birchtech Corp vs. Fairfax Financial Holdings |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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