Correlation Between BTC Health and Lykos Metals
Can any of the company-specific risk be diversified away by investing in both BTC Health and Lykos 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 Lykos 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 Lykos Metals, you can compare the effects of market volatilities on BTC Health and Lykos 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 Lykos Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Health and Lykos Metals.
Diversification Opportunities for BTC Health and Lykos Metals
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BTC and Lykos is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and Lykos Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lykos 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 Lykos Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lykos Metals has no effect on the direction of BTC Health i.e., BTC Health and Lykos Metals go up and down completely randomly.
Pair Corralation between BTC Health and Lykos Metals
Assuming the 90 days trading horizon BTC Health Limited is expected to generate 0.71 times more return on investment than Lykos Metals. However, BTC Health Limited is 1.41 times less risky than Lykos Metals. It trades about 0.25 of its potential returns per unit of risk. Lykos Metals is currently generating about -0.15 per unit of risk. If you would invest 5.90 in BTC Health Limited on October 11, 2024 and sell it today you would earn a total of 1.50 from holding BTC Health Limited or generate 25.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTC Health Limited vs. Lykos Metals
Performance |
| Timeline |
| BTC Health Limited |
| Lykos Metals |
BTC Health and Lykos Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTC Health and Lykos Metals
The main advantage of trading using opposite BTC Health and Lykos Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Health position performs unexpectedly, Lykos 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 Lykos Metals will offset losses from the drop in Lykos Metals' long position.| BTC Health vs. Neurotech International | BTC Health vs. Retail Food Group | BTC Health vs. Charter Hall Retail | BTC Health vs. Zoom2u Technologies |
| Lykos Metals vs. Firstwave Cloud Technology | Lykos Metals vs. Ras Technology Holdings | Lykos Metals vs. Sonic Healthcare | Lykos Metals vs. BTC Health Limited |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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