Correlation Between Birchtech Corp and Sparx Technology
Can any of the company-specific risk be diversified away by investing in both Birchtech Corp and Sparx Technology 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 Sparx Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Birchtech Corp and Sparx Technology, you can compare the effects of market volatilities on Birchtech Corp and Sparx Technology 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 Sparx Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birchtech Corp and Sparx Technology.
Diversification Opportunities for Birchtech Corp and Sparx Technology
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Birchtech and Sparx is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Birchtech Corp and Sparx Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparx Technology 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 Sparx Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparx Technology has no effect on the direction of Birchtech Corp i.e., Birchtech Corp and Sparx Technology go up and down completely randomly.
Pair Corralation between Birchtech Corp and Sparx Technology
Assuming the 90 days trading horizon Birchtech Corp is expected to under-perform the Sparx Technology. In addition to that, Birchtech Corp is 1.96 times more volatile than Sparx Technology. It trades about -0.17 of its total potential returns per unit of risk. Sparx Technology is currently generating about 0.32 per unit of volatility. If you would invest 2,337 in Sparx Technology on September 5, 2024 and sell it today you would earn a total of 329.00 from holding Sparx Technology or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Birchtech Corp vs. Sparx Technology
Performance |
| Timeline |
| Birchtech Corp |
| Sparx Technology |
Birchtech Corp and Sparx Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Birchtech Corp and Sparx Technology
The main advantage of trading using opposite Birchtech Corp and Sparx Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birchtech Corp position performs unexpectedly, Sparx Technology 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 Sparx Technology will offset losses from the drop in Sparx Technology's long position.| Birchtech Corp vs. Apple Inc CDR | Birchtech Corp vs. NVIDIA CDR | Birchtech Corp vs. Microsoft Corp CDR | Birchtech Corp vs. Amazon CDR |
| Sparx Technology vs. Tree Island Steel | Sparx Technology vs. Ocumetics Technology Corp | Sparx Technology vs. Birchtech Corp | Sparx Technology vs. Broadcom |
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 Correlations module to find global opportunities by holding instruments from different markets.
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