Correlation Between BTC Health and Capricorn Metals
Can any of the company-specific risk be diversified away by investing in both BTC Health and Capricorn Metals 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 Capricorn Metals 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 Capricorn Metals, you can compare the effects of market volatilities on BTC Health and Capricorn Metals 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 Capricorn Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Health and Capricorn Metals.
Diversification Opportunities for BTC Health and Capricorn Metals
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BTC and Capricorn is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and Capricorn Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capricorn Metals 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 Capricorn Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capricorn Metals has no effect on the direction of BTC Health i.e., BTC Health and Capricorn Metals go up and down completely randomly.
Pair Corralation between BTC Health and Capricorn Metals
Assuming the 90 days trading horizon BTC Health Limited is expected to generate 2.05 times more return on investment than Capricorn Metals. However, BTC Health is 2.05 times more volatile than Capricorn Metals. It trades about 0.05 of its potential returns per unit of risk. Capricorn Metals is currently generating about 0.03 per unit of risk. If you would invest 3.80 in BTC Health Limited on October 7, 2024 and sell it today you would earn a total of 3.80 from holding BTC Health Limited or generate 100.0% 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. Capricorn Metals
Performance |
| Timeline |
| BTC Health Limited |
| Capricorn Metals |
BTC Health and Capricorn Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTC Health and Capricorn Metals
The main advantage of trading using opposite BTC Health and Capricorn Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Health position performs unexpectedly, Capricorn Metals 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 Capricorn Metals will offset losses from the drop in Capricorn Metals' 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 |
| Capricorn Metals vs. ABACUS STORAGE KING | Capricorn Metals vs. Aeon Metals | Capricorn Metals vs. Perseus Mining | Capricorn Metals vs. Truscott Mining Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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