Correlation Between BTU Metals and Japan Gold
Can any of the company-specific risk be diversified away by investing in both BTU Metals and Japan Gold 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 Japan Gold 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 Japan Gold Corp, you can compare the effects of market volatilities on BTU Metals and Japan Gold 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 Japan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTU Metals and Japan Gold.
Diversification Opportunities for BTU Metals and Japan Gold
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BTU and Japan is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp and Japan Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Gold Corp 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 Japan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Gold Corp has no effect on the direction of BTU Metals i.e., BTU Metals and Japan Gold go up and down completely randomly.
Pair Corralation between BTU Metals and Japan Gold
Assuming the 90 days horizon BTU Metals Corp is expected to generate 1.18 times more return on investment than Japan Gold. However, BTU Metals is 1.18 times more volatile than Japan Gold Corp. It trades about 0.04 of its potential returns per unit of risk. Japan Gold Corp is currently generating about 0.02 per unit of risk. If you would invest 1.95 in BTU Metals Corp on September 3, 2024 and sell it today you would earn a total of 0.10 from holding BTU Metals Corp or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.32% |
| Values | Daily Returns |
BTU Metals Corp vs. Japan Gold Corp
Performance |
| Timeline |
| BTU Metals Corp |
| Japan Gold Corp |
BTU Metals and Japan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTU Metals and Japan Gold
The main advantage of trading using opposite BTU Metals and Japan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU Metals position performs unexpectedly, Japan Gold 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 Japan Gold will offset losses from the drop in Japan Gold's long position.| BTU Metals vs. Harmony Gold Mining | BTU Metals vs. SPACE | BTU Metals vs. T Rowe Price | BTU Metals vs. Ampleforth |
| Japan Gold vs. Harmony Gold Mining | Japan Gold vs. SPACE | Japan Gold vs. T Rowe Price | Japan Gold vs. Ampleforth |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Global Correlations Find global opportunities by holding instruments from different markets |