Correlation Between BTC Health and Australian Dairy
Can any of the company-specific risk be diversified away by investing in both BTC Health and Australian Dairy 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 Australian Dairy 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 Australian Dairy Farms, you can compare the effects of market volatilities on BTC Health and Australian Dairy 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 Australian Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Health and Australian Dairy.
Diversification Opportunities for BTC Health and Australian Dairy
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between BTC and Australian is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and Australian Dairy Farms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Dairy Farms 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 Australian Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Dairy Farms has no effect on the direction of BTC Health i.e., BTC Health and Australian Dairy go up and down completely randomly.
Pair Corralation between BTC Health and Australian Dairy
Assuming the 90 days trading horizon BTC Health is expected to generate 3.1 times less return on investment than Australian Dairy. But when comparing it to its historical volatility, BTC Health Limited is 1.38 times less risky than Australian Dairy. It trades about 0.02 of its potential returns per unit of risk. Australian Dairy Farms is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.90 in Australian Dairy Farms on August 25, 2024 and sell it today you would earn a total of 0.90 from holding Australian Dairy Farms or generate 47.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTC Health Limited vs. Australian Dairy Farms
Performance |
| Timeline |
| BTC Health Limited |
| Australian Dairy Farms |
BTC Health and Australian Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTC Health and Australian Dairy
The main advantage of trading using opposite BTC Health and Australian Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Health position performs unexpectedly, Australian Dairy 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 Australian Dairy will offset losses from the drop in Australian Dairy's long position.| BTC Health vs. Aneka Tambang Tbk | BTC Health vs. Rio Tinto | BTC Health vs. BHP Group Limited | BTC Health vs. Block Inc |
| Australian Dairy vs. BTC Health Limited | Australian Dairy vs. Health and Plant | Australian Dairy vs. Queste Communications | Australian Dairy vs. EVE Health Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |