Correlation Between BTC Health and Oakridge International
Can any of the company-specific risk be diversified away by investing in both BTC Health and Oakridge International 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 Oakridge International 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 Oakridge International, you can compare the effects of market volatilities on BTC Health and Oakridge International 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 Oakridge International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Health and Oakridge International.
Diversification Opportunities for BTC Health and Oakridge International
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BTC and Oakridge is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and Oakridge International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakridge International 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 Oakridge International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakridge International has no effect on the direction of BTC Health i.e., BTC Health and Oakridge International go up and down completely randomly.
Pair Corralation between BTC Health and Oakridge International
Assuming the 90 days trading horizon BTC Health Limited is expected to generate 1.43 times more return on investment than Oakridge International. However, BTC Health is 1.43 times more volatile than Oakridge International. It trades about 0.04 of its potential returns per unit of risk. Oakridge International is currently generating about -0.01 per unit of risk. If you would invest 5.20 in BTC Health Limited on September 14, 2024 and sell it today you would earn a total of 1.50 from holding BTC Health Limited or generate 28.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
BTC Health Limited vs. Oakridge International
Performance |
| Timeline |
| BTC Health Limited |
| Oakridge International |
BTC Health and Oakridge International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTC Health and Oakridge International
The main advantage of trading using opposite BTC Health and Oakridge International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Health position performs unexpectedly, Oakridge International 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 Oakridge International will offset losses from the drop in Oakridge International's long position.| BTC Health vs. Talisman Mining | BTC Health vs. Red Hill Iron | BTC Health vs. M3 Mining | BTC Health vs. Chalice Mining Limited |
| Oakridge International vs. PVW Resources | Oakridge International vs. Woolworths | Oakridge International vs. Wesfarmers | Oakridge International vs. Ramsay Health Care |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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