Correlation Between BTC Health and Xstate Resources
Can any of the company-specific risk be diversified away by investing in both BTC Health and Xstate Resources 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 Xstate Resources 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 Xstate Resources, you can compare the effects of market volatilities on BTC Health and Xstate Resources 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 Xstate Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Health and Xstate Resources.
Diversification Opportunities for BTC Health and Xstate Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BTC and Xstate is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and Xstate Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xstate Resources 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 Xstate Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xstate Resources has no effect on the direction of BTC Health i.e., BTC Health and Xstate Resources go up and down completely randomly.
Pair Corralation between BTC Health and Xstate Resources
Assuming the 90 days trading horizon BTC Health is expected to generate 1.76 times less return on investment than Xstate Resources. But when comparing it to its historical volatility, BTC Health Limited is 1.81 times less risky than Xstate Resources. It trades about 0.04 of its potential returns per unit of risk. Xstate Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1.50 in Xstate Resources on September 2, 2024 and sell it today you would lose (0.60) from holding Xstate Resources or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTC Health Limited vs. Xstate Resources
Performance |
| Timeline |
| BTC Health Limited |
| Xstate Resources |
BTC Health and Xstate Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTC Health and Xstate Resources
The main advantage of trading using opposite BTC Health and Xstate Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Health position performs unexpectedly, Xstate Resources 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 Xstate Resources will offset losses from the drop in Xstate Resources' long position.| BTC Health vs. Aneka Tambang Tbk | BTC Health vs. Commonwealth Bank | BTC Health vs. Commonwealth Bank of | BTC Health vs. Australia and New |
| Xstate Resources vs. Westpac Banking | Xstate Resources vs. ABACUS STORAGE KING | Xstate Resources vs. Odyssey Energy | Xstate Resources vs. Aristocrat Leisure |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |