Correlation Between GXC and BTT
Can any of the company-specific risk be diversified away by investing in both GXC and BTT 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 GXC and BTT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GXC and BTT, you can compare the effects of market volatilities on GXC and BTT 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 GXC with a short position of BTT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GXC and BTT.
Diversification Opportunities for GXC and BTT
Pay attention - limited upside
The 3 months correlation between GXC and BTT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GXC and BTT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTT and GXC 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 GXC are associated (or correlated) with BTT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTT has no effect on the direction of GXC i.e., GXC and BTT go up and down completely randomly.
Pair Corralation between GXC and BTT
If you would invest 0.00 in BTT on August 27, 2024 and sell it today you would earn a total of 0.00 from holding BTT or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
GXC vs. BTT
Performance |
| Timeline |
| GXC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| BTT |
GXC and BTT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GXC and BTT
The main advantage of trading using opposite GXC and BTT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GXC position performs unexpectedly, BTT 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 BTT will offset losses from the drop in BTT's long position.The idea behind GXC and BTT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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