Correlation Between BTU Metals and Sitka Gold
Can any of the company-specific risk be diversified away by investing in both BTU Metals and Sitka Gold 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 Sitka Gold 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 Sitka Gold Corp, you can compare the effects of market volatilities on BTU Metals and Sitka Gold 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 Sitka Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTU Metals and Sitka Gold.
Diversification Opportunities for BTU Metals and Sitka Gold
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BTU and Sitka is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp and Sitka Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitka Gold Corp 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 Sitka Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitka Gold Corp has no effect on the direction of BTU Metals i.e., BTU Metals and Sitka Gold go up and down completely randomly.
Pair Corralation between BTU Metals and Sitka Gold
Assuming the 90 days horizon BTU Metals Corp is expected to under-perform the Sitka Gold. But the otc stock apears to be less risky and, when comparing its historical volatility, BTU Metals Corp is 1.56 times less risky than Sitka Gold. The otc stock trades about -0.16 of its potential returns per unit of risk. The Sitka Gold Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Sitka Gold Corp on September 2, 2024 and sell it today you would earn a total of 14.00 from holding Sitka Gold Corp or generate 77.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTU Metals Corp vs. Sitka Gold Corp
Performance |
| Timeline |
| BTU Metals Corp |
| Sitka Gold Corp |
BTU Metals and Sitka Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTU Metals and Sitka Gold
The main advantage of trading using opposite BTU Metals and Sitka Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU Metals position performs unexpectedly, Sitka Gold 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 Sitka Gold will offset losses from the drop in Sitka Gold's long position.| BTU Metals vs. Aurion Resources | BTU Metals vs. Rio2 Limited | BTU Metals vs. Palamina Corp | BTU Metals vs. Grande Portage Resources |
| Sitka Gold vs. Aurion Resources | Sitka Gold vs. Minera Alamos | Sitka Gold vs. Rio2 Limited | Sitka Gold vs. Roscan 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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