Correlation Between BTU Metals and Sibanye Stillwater
Can any of the company-specific risk be diversified away by investing in both BTU Metals and Sibanye Stillwater 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 Sibanye Stillwater 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 Sibanye Stillwater Limited, you can compare the effects of market volatilities on BTU Metals and Sibanye Stillwater 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 Sibanye Stillwater. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTU Metals and Sibanye Stillwater.
Diversification Opportunities for BTU Metals and Sibanye Stillwater
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between BTU and Sibanye is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp and Sibanye Stillwater Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sibanye Stillwater 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 Sibanye Stillwater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sibanye Stillwater has no effect on the direction of BTU Metals i.e., BTU Metals and Sibanye Stillwater go up and down completely randomly.
Pair Corralation between BTU Metals and Sibanye Stillwater
Assuming the 90 days horizon BTU Metals Corp is expected to generate 1.03 times more return on investment than Sibanye Stillwater. However, BTU Metals is 1.03 times more volatile than Sibanye Stillwater Limited. It trades about 0.0 of its potential returns per unit of risk. Sibanye Stillwater Limited is currently generating about -0.16 per unit of risk. If you would invest 2.05 in BTU Metals Corp on October 22, 2024 and sell it today you would lose (0.05) from holding BTU Metals Corp or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
BTU Metals Corp vs. Sibanye Stillwater Limited
Performance |
| Timeline |
| BTU Metals Corp |
| Sibanye Stillwater |
BTU Metals and Sibanye Stillwater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTU Metals and Sibanye Stillwater
The main advantage of trading using opposite BTU Metals and Sibanye Stillwater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU Metals position performs unexpectedly, Sibanye Stillwater 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 Sibanye Stillwater will offset losses from the drop in Sibanye Stillwater's long position.| BTU Metals vs. Gfl Environmental Holdings | BTU Metals vs. Summit Environmental | BTU Metals vs. Air Transport Services | BTU Metals vs. Enzyme Environmental Solutions |
| Sibanye Stillwater vs. Vior Inc | Sibanye Stillwater vs. Peloton Minerals | Sibanye Stillwater vs. BTU Metals Corp | Sibanye Stillwater vs. Palamina 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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