Correlation Between BTU Metals and Matador Mining
Can any of the company-specific risk be diversified away by investing in both BTU Metals and Matador Mining 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 Matador Mining 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 Matador Mining Limited, you can compare the effects of market volatilities on BTU Metals and Matador Mining 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 Matador Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTU Metals and Matador Mining.
Diversification Opportunities for BTU Metals and Matador Mining
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BTU and Matador is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp and Matador Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matador Mining 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 Matador Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matador Mining has no effect on the direction of BTU Metals i.e., BTU Metals and Matador Mining go up and down completely randomly.
Pair Corralation between BTU Metals and Matador Mining
If you would invest 1.91 in BTU Metals Corp on August 29, 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. Matador Mining Limited
Performance |
| Timeline |
| BTU Metals Corp |
| Matador Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BTU Metals and Matador Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTU Metals and Matador Mining
The main advantage of trading using opposite BTU Metals and Matador Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU Metals position performs unexpectedly, Matador Mining 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 Matador Mining will offset losses from the drop in Matador Mining'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 |
| Matador Mining vs. Rio2 Limited | Matador Mining vs. Aurion Resources | Matador Mining vs. Norsemont Mining | Matador Mining vs. Minaurum Gold |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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