Correlation Between BTU Metals and GFG Resources
Can any of the company-specific risk be diversified away by investing in both BTU Metals and GFG 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 BTU Metals and GFG Resources 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 GFG Resources, you can compare the effects of market volatilities on BTU Metals and GFG 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 BTU Metals with a short position of GFG Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTU Metals and GFG Resources.
Diversification Opportunities for BTU Metals and GFG Resources
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BTU and GFG is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp and GFG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFG 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 GFG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFG Resources has no effect on the direction of BTU Metals i.e., BTU Metals and GFG Resources go up and down completely randomly.
Pair Corralation between BTU Metals and GFG Resources
Assuming the 90 days horizon BTU Metals Corp is expected to generate 1.89 times more return on investment than GFG Resources. However, BTU Metals is 1.89 times more volatile than GFG Resources. It trades about 0.22 of its potential returns per unit of risk. GFG Resources is currently generating about -0.22 per unit of risk. If you would invest 2.00 in BTU Metals Corp on December 1, 2024 and sell it today you would earn a total of 0.27 from holding BTU Metals Corp or generate 13.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTU Metals Corp vs. GFG Resources
Performance |
| Timeline |
| BTU Metals Corp |
| GFG Resources |
BTU Metals and GFG Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTU Metals and GFG Resources
The main advantage of trading using opposite BTU Metals and GFG Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU Metals position performs unexpectedly, GFG 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 GFG Resources will offset losses from the drop in GFG Resources' long position.| BTU Metals vs. Alto Ingredients | BTU Metals vs. Ecovyst | BTU Metals vs. Balchem | BTU Metals vs. Sealed Air |
| GFG Resources vs. Japan Gold Corp | GFG Resources vs. Robex Resources | GFG Resources vs. Rover Metals Corp | GFG Resources vs. Orefinders Resources |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |