Correlation Between BTC Health and Pacific Current
Can any of the company-specific risk be diversified away by investing in both BTC Health and Pacific Current 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 Pacific Current 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 Pacific Current Group, you can compare the effects of market volatilities on BTC Health and Pacific Current 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 Pacific Current. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Health and Pacific Current.
Diversification Opportunities for BTC Health and Pacific Current
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BTC and Pacific is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and Pacific Current Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Current Group 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 Pacific Current. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Current Group has no effect on the direction of BTC Health i.e., BTC Health and Pacific Current go up and down completely randomly.
Pair Corralation between BTC Health and Pacific Current
Assuming the 90 days trading horizon BTC Health Limited is expected to generate 2.11 times more return on investment than Pacific Current. However, BTC Health is 2.11 times more volatile than Pacific Current Group. It trades about 0.04 of its potential returns per unit of risk. Pacific Current Group is currently generating about 0.05 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTC Health Limited vs. Pacific Current Group
Performance |
| Timeline |
| BTC Health Limited |
| Pacific Current Group |
BTC Health and Pacific Current Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTC Health and Pacific Current
The main advantage of trading using opposite BTC Health and Pacific Current positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Health position performs unexpectedly, Pacific Current 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 Pacific Current will offset losses from the drop in Pacific Current's long position.The idea behind BTC Health Limited and Pacific Current Group 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.| Pacific Current vs. Mirrabooka Investments | Pacific Current vs. K2 Asset Management | Pacific Current vs. EMvision Medical Devices | Pacific Current vs. Clime Investment Management |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |