Correlation Between BTU Metals and Omineca Mining
Can any of the company-specific risk be diversified away by investing in both BTU Metals and Omineca 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 Omineca 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 Omineca Mining and, you can compare the effects of market volatilities on BTU Metals and Omineca 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 Omineca Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTU Metals and Omineca Mining.
Diversification Opportunities for BTU Metals and Omineca Mining
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BTU and Omineca is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp and Omineca Mining and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omineca 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 Omineca Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omineca Mining has no effect on the direction of BTU Metals i.e., BTU Metals and Omineca Mining go up and down completely randomly.
Pair Corralation between BTU Metals and Omineca Mining
Assuming the 90 days horizon BTU Metals Corp is expected to generate 0.28 times more return on investment than Omineca Mining. However, BTU Metals Corp is 3.56 times less risky than Omineca Mining. It trades about 0.22 of its potential returns per unit of risk. Omineca Mining and is currently generating about 0.01 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTU Metals Corp vs. Omineca Mining and
Performance |
| Timeline |
| BTU Metals Corp |
| Omineca Mining |
BTU Metals and Omineca Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTU Metals and Omineca Mining
The main advantage of trading using opposite BTU Metals and Omineca Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU Metals position performs unexpectedly, Omineca 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 Omineca Mining will offset losses from the drop in Omineca Mining's long position.| BTU Metals vs. Alto Ingredients | BTU Metals vs. Ecovyst | BTU Metals vs. Balchem | BTU Metals vs. Sealed Air |
| Omineca Mining vs. Quebec Precious Metals | Omineca Mining vs. Elemental Royalties Corp | Omineca Mining vs. Aurelius Minerals | Omineca Mining vs. Serabi Gold PLC |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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