Correlation Between BTU Metals and Black Tusk
Can any of the company-specific risk be diversified away by investing in both BTU Metals and Black Tusk 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 BTU Metals and Black Tusk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTU Metals Corp and Black Tusk Resources, you can compare the effects of market volatilities on BTU Metals and Black Tusk 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 BTU Metals with a short position of Black Tusk. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTU Metals and Black Tusk.
Diversification Opportunities for BTU Metals and Black Tusk
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BTU and Black is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp and Black Tusk Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Tusk Resources and BTU Metals 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 BTU Metals Corp are associated (or correlated) with Black Tusk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Tusk Resources has no effect on the direction of BTU Metals i.e., BTU Metals and Black Tusk go up and down completely randomly.
Pair Corralation between BTU Metals and Black Tusk
If you would invest 1.91 in BTU Metals Corp on August 28, 2024 and sell it today you would earn a total of 0.14 from holding BTU Metals Corp or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
BTU Metals Corp vs. Black Tusk Resources
Performance |
| Timeline |
| BTU Metals Corp |
| Black Tusk Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
BTU Metals and Black Tusk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTU Metals and Black Tusk
The main advantage of trading using opposite BTU Metals and Black Tusk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU Metals position performs unexpectedly, Black Tusk 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 Black Tusk will offset losses from the drop in Black Tusk's long position.| BTU Metals vs. Aurion Resources | BTU Metals vs. Liberty Gold Corp | BTU Metals vs. Orezone Gold Corp | BTU Metals vs. Fortuna Silver Mines |
| Black Tusk vs. Palamina Corp | Black Tusk vs. Gold Springs Resource | Black Tusk vs. BTU Metals Corp | Black Tusk vs. Norsemont Mining |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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