Correlation Between BTC Health and Seven West
Can any of the company-specific risk be diversified away by investing in both BTC Health and Seven West 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 Seven West 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 Seven West Media, you can compare the effects of market volatilities on BTC Health and Seven West 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 Seven West. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Health and Seven West.
Diversification Opportunities for BTC Health and Seven West
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between BTC and Seven is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and Seven West Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven West Media 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 Seven West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven West Media has no effect on the direction of BTC Health i.e., BTC Health and Seven West go up and down completely randomly.
Pair Corralation between BTC Health and Seven West
Assuming the 90 days trading horizon BTC Health Limited is expected to generate 1.4 times more return on investment than Seven West. However, BTC Health is 1.4 times more volatile than Seven West Media. It trades about 0.02 of its potential returns per unit of risk. Seven West Media is currently generating about -0.04 per unit of risk. If you would invest 5.50 in BTC Health Limited on August 31, 2024 and sell it today you would earn a total of 0.20 from holding BTC Health Limited or generate 3.64% 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. Seven West Media
Performance |
| Timeline |
| BTC Health Limited |
| Seven West Media |
BTC Health and Seven West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTC Health and Seven West
The main advantage of trading using opposite BTC Health and Seven West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Health position performs unexpectedly, Seven West 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 Seven West will offset losses from the drop in Seven West's long position.| BTC Health vs. Alternative Investment Trust | BTC Health vs. IDP Education | BTC Health vs. Sandon Capital Investments | BTC Health vs. EMvision Medical Devices |
| Seven West vs. Aneka Tambang Tbk | Seven West vs. Woolworths | Seven West vs. Commonwealth Bank | Seven West vs. BHP Group 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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