Correlation Between BTC Health and NEWMONT PORATION
Can any of the company-specific risk be diversified away by investing in both BTC Health and NEWMONT PORATION 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 NEWMONT PORATION 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 NEWMONT PORATION CDI, you can compare the effects of market volatilities on BTC Health and NEWMONT PORATION 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 NEWMONT PORATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Health and NEWMONT PORATION.
Diversification Opportunities for BTC Health and NEWMONT PORATION
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BTC and NEWMONT is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and NEWMONT PORATION CDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWMONT PORATION CDI 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 NEWMONT PORATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWMONT PORATION CDI has no effect on the direction of BTC Health i.e., BTC Health and NEWMONT PORATION go up and down completely randomly.
Pair Corralation between BTC Health and NEWMONT PORATION
Assuming the 90 days trading horizon BTC Health Limited is expected to generate 2.32 times more return on investment than NEWMONT PORATION. However, BTC Health is 2.32 times more volatile than NEWMONT PORATION CDI. It trades about 0.04 of its potential returns per unit of risk. NEWMONT PORATION CDI is currently generating about 0.03 per unit of risk. If you would invest 3.70 in BTC Health Limited on September 12, 2024 and sell it today you would earn a total of 2.20 from holding BTC Health Limited or generate 59.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 57.23% |
| Values | Daily Returns |
BTC Health Limited vs. NEWMONT PORATION CDI
Performance |
| Timeline |
| BTC Health Limited |
| NEWMONT PORATION CDI |
BTC Health and NEWMONT PORATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTC Health and NEWMONT PORATION
The main advantage of trading using opposite BTC Health and NEWMONT PORATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Health position performs unexpectedly, NEWMONT PORATION 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 NEWMONT PORATION will offset losses from the drop in NEWMONT PORATION's long position.The idea behind BTC Health Limited and NEWMONT PORATION CDI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NEWMONT PORATION vs. AiMedia Technologies | NEWMONT PORATION vs. Hutchison Telecommunications | NEWMONT PORATION vs. Step One Clothing | NEWMONT PORATION vs. COAST ENTERTAINMENT HOLDINGS |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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