Correlation Between Birchtech Corp and Xtract One
Can any of the company-specific risk be diversified away by investing in both Birchtech Corp and Xtract One 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 Xtract One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Birchtech Corp and Xtract One Technologies, you can compare the effects of market volatilities on Birchtech Corp and Xtract One 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 Xtract One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birchtech Corp and Xtract One.
Diversification Opportunities for Birchtech Corp and Xtract One
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Birchtech and Xtract is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Birchtech Corp and Xtract One Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtract One Technologies 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 Xtract One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtract One Technologies has no effect on the direction of Birchtech Corp i.e., Birchtech Corp and Xtract One go up and down completely randomly.
Pair Corralation between Birchtech Corp and Xtract One
Assuming the 90 days trading horizon Birchtech Corp is expected to under-perform the Xtract One. In addition to that, Birchtech Corp is 1.15 times more volatile than Xtract One Technologies. It trades about -0.13 of its total potential returns per unit of risk. Xtract One Technologies is currently generating about 0.03 per unit of volatility. If you would invest 56.00 in Xtract One Technologies on August 27, 2024 and sell it today you would earn a total of 13.00 from holding Xtract One Technologies or generate 23.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 2.86% |
| Values | Daily Returns |
Birchtech Corp vs. Xtract One Technologies
Performance |
| Timeline |
| Birchtech Corp |
| Xtract One Technologies |
Birchtech Corp and Xtract One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Birchtech Corp and Xtract One
The main advantage of trading using opposite Birchtech Corp and Xtract One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birchtech Corp position performs unexpectedly, Xtract One 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 Xtract One will offset losses from the drop in Xtract One's long position.| Birchtech Corp vs. NVIDIA CDR | Birchtech Corp vs. Apple Inc CDR | Birchtech Corp vs. Microsoft Corp CDR | Birchtech Corp vs. Alphabet Inc CDR |
| Xtract One vs. Slate Grocery REIT | Xtract One vs. Roots Corp | Xtract One vs. Aimia Inc | Xtract One vs. Tucows Inc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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