Correlation Between BTC Health and Austral Gold
Can any of the company-specific risk be diversified away by investing in both BTC Health and Austral Gold 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 BTC Health and Austral Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTC Health Limited and Austral Gold, you can compare the effects of market volatilities on BTC Health and Austral Gold 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 BTC Health with a short position of Austral Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Health and Austral Gold.
Diversification Opportunities for BTC Health and Austral Gold
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BTC and Austral is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and Austral Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austral Gold and BTC Health 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 BTC Health Limited are associated (or correlated) with Austral Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austral Gold has no effect on the direction of BTC Health i.e., BTC Health and Austral Gold go up and down completely randomly.
Pair Corralation between BTC Health and Austral Gold
Assuming the 90 days trading horizon BTC Health is expected to generate 20.48 times less return on investment than Austral Gold. But when comparing it to its historical volatility, BTC Health Limited is 2.08 times less risky than Austral Gold. It trades about 0.0 of its potential returns per unit of risk. Austral Gold is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2.20 in Austral Gold on September 2, 2024 and sell it today you would lose (0.10) from holding Austral Gold or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTC Health Limited vs. Austral Gold
Performance |
| Timeline |
| BTC Health Limited |
| Austral Gold |
BTC Health and Austral Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTC Health and Austral Gold
The main advantage of trading using opposite BTC Health and Austral Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Health position performs unexpectedly, Austral Gold 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 Austral Gold will offset losses from the drop in Austral Gold's long position.| BTC Health vs. Aneka Tambang Tbk | BTC Health vs. Commonwealth Bank | BTC Health vs. Commonwealth Bank of | BTC Health vs. Australia and New |
| Austral Gold vs. Regal Investment | Austral Gold vs. Centuria Industrial Reit | Austral Gold vs. Steamships Trading | Austral Gold vs. Stelar Metals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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