Correlation Between BTU Metals and Mining Global
Can any of the company-specific risk be diversified away by investing in both BTU Metals and Mining Global 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 Mining Global 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 Mining Global, you can compare the effects of market volatilities on BTU Metals and Mining Global 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 Mining Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTU Metals and Mining Global.
Diversification Opportunities for BTU Metals and Mining Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BTU and Mining is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp and Mining Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mining Global 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 Mining Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mining Global has no effect on the direction of BTU Metals i.e., BTU Metals and Mining Global go up and down completely randomly.
Pair Corralation between BTU Metals and Mining Global
Assuming the 90 days horizon BTU Metals is expected to generate 10.46 times less return on investment than Mining Global. But when comparing it to its historical volatility, BTU Metals Corp is 3.43 times less risky than Mining Global. It trades about 0.04 of its potential returns per unit of risk. Mining Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Mining Global on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Mining Global or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
BTU Metals Corp vs. Mining Global
Performance |
| Timeline |
| BTU Metals Corp |
| Mining Global |
BTU Metals and Mining Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTU Metals and Mining Global
The main advantage of trading using opposite BTU Metals and Mining Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU Metals position performs unexpectedly, Mining Global 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 Mining Global will offset losses from the drop in Mining Global's long position.| BTU Metals vs. Harmony Gold Mining | BTU Metals vs. SPACE | BTU Metals vs. T Rowe Price | BTU Metals vs. Ampleforth |
| Mining Global vs. Allegiant Gold | Mining Global vs. Rackla Metals | Mining Global vs. Lavras Gold Corp | Mining Global vs. Gncc Capital |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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