Correlation Between BTU Metals and Cirmaker Technology
Can any of the company-specific risk be diversified away by investing in both BTU Metals and Cirmaker Technology 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 Cirmaker Technology 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 Cirmaker Technology, you can compare the effects of market volatilities on BTU Metals and Cirmaker Technology 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 Cirmaker Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTU Metals and Cirmaker Technology.
Diversification Opportunities for BTU Metals and Cirmaker Technology
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between BTU and Cirmaker is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp and Cirmaker Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirmaker Technology 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 Cirmaker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirmaker Technology has no effect on the direction of BTU Metals i.e., BTU Metals and Cirmaker Technology go up and down completely randomly.
Pair Corralation between BTU Metals and Cirmaker Technology
Assuming the 90 days horizon BTU Metals is expected to generate 11.31 times less return on investment than Cirmaker Technology. In addition to that, BTU Metals is 1.06 times more volatile than Cirmaker Technology. It trades about 0.02 of its total potential returns per unit of risk. Cirmaker Technology is currently generating about 0.23 per unit of volatility. If you would invest 4.50 in Cirmaker Technology on October 20, 2024 and sell it today you would earn a total of 0.90 from holding Cirmaker Technology or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
BTU Metals Corp vs. Cirmaker Technology
Performance |
| Timeline |
| BTU Metals Corp |
| Cirmaker Technology |
BTU Metals and Cirmaker Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTU Metals and Cirmaker Technology
The main advantage of trading using opposite BTU Metals and Cirmaker Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU Metals position performs unexpectedly, Cirmaker Technology 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 Cirmaker Technology will offset losses from the drop in Cirmaker Technology's long position.| BTU Metals vs. Avient Corp | BTU Metals vs. Ecovyst | BTU Metals vs. Sensient Technologies | BTU Metals vs. MYR Group |
| Cirmaker Technology vs. Ironveld Plc | Cirmaker Technology vs. Playa Hotels Resorts | Cirmaker Technology vs. American Environmental | Cirmaker Technology vs. Hasbro Inc |
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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