Correlation Between Grande Portage and BTU Metals
Can any of the company-specific risk be diversified away by investing in both Grande Portage and BTU Metals 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 Grande Portage and BTU Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grande Portage Resources and BTU Metals Corp, you can compare the effects of market volatilities on Grande Portage and BTU Metals 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 Grande Portage with a short position of BTU Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Portage and BTU Metals.
Diversification Opportunities for Grande Portage and BTU Metals
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Grande and BTU is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Grande Portage Resources and BTU Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTU Metals Corp and Grande Portage 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 Grande Portage Resources are associated (or correlated) with BTU Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTU Metals Corp has no effect on the direction of Grande Portage i.e., Grande Portage and BTU Metals go up and down completely randomly.
Pair Corralation between Grande Portage and BTU Metals
Assuming the 90 days horizon Grande Portage Resources is expected to under-perform the BTU Metals. In addition to that, Grande Portage is 2.64 times more volatile than BTU Metals Corp. It trades about -0.01 of its total potential returns per unit of risk. BTU Metals Corp is currently generating about 0.22 per unit of volatility. 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grande Portage Resources vs. BTU Metals Corp
Performance |
| Timeline |
| Grande Portage Resources |
| BTU Metals Corp |
Grande Portage and BTU Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grande Portage and BTU Metals
The main advantage of trading using opposite Grande Portage and BTU Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Portage position performs unexpectedly, BTU Metals 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 BTU Metals will offset losses from the drop in BTU Metals' long position.| Grande Portage vs. Puma Exploration | Grande Portage vs. Sixty North Gold | Grande Portage vs. Red Pine Exploration | Grande Portage vs. Altamira Gold Corp |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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