Correlation Between BTU Metals and Peloton Minerals
Can any of the company-specific risk be diversified away by investing in both BTU Metals and Peloton Minerals 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 Peloton Minerals 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 Peloton Minerals, you can compare the effects of market volatilities on BTU Metals and Peloton Minerals 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 Peloton Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTU Metals and Peloton Minerals.
Diversification Opportunities for BTU Metals and Peloton Minerals
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BTU and Peloton is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp and Peloton Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peloton Minerals 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 Peloton Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peloton Minerals has no effect on the direction of BTU Metals i.e., BTU Metals and Peloton Minerals go up and down completely randomly.
Pair Corralation between BTU Metals and Peloton Minerals
Assuming the 90 days horizon BTU Metals is expected to generate 3.64 times less return on investment than Peloton Minerals. But when comparing it to its historical volatility, BTU Metals Corp is 7.58 times less risky than Peloton Minerals. It trades about 0.21 of its potential returns per unit of risk. Peloton Minerals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5.35 in Peloton Minerals on August 29, 2024 and sell it today you would earn a total of 0.85 from holding Peloton Minerals or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTU Metals Corp vs. Peloton Minerals
Performance |
| Timeline |
| BTU Metals Corp |
| Peloton Minerals |
BTU Metals and Peloton Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTU Metals and Peloton Minerals
The main advantage of trading using opposite BTU Metals and Peloton Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU Metals position performs unexpectedly, Peloton Minerals 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 Peloton Minerals will offset losses from the drop in Peloton Minerals' 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 |
| Peloton Minerals vs. BTU Metals Corp | Peloton Minerals vs. Gold Springs Resource | Peloton Minerals vs. Norsemont Mining | Peloton Minerals vs. FireFox Gold Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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