Correlation Between Iodm and BTC Health
Can any of the company-specific risk be diversified away by investing in both Iodm and BTC Health 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 Iodm and BTC Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iodm and BTC Health Limited, you can compare the effects of market volatilities on Iodm and BTC Health 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 Iodm with a short position of BTC Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iodm and BTC Health.
Diversification Opportunities for Iodm and BTC Health
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Iodm and BTC is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Iodm and BTC Health Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTC Health Limited and Iodm 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 Iodm are associated (or correlated) with BTC Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTC Health Limited has no effect on the direction of Iodm i.e., Iodm and BTC Health go up and down completely randomly.
Pair Corralation between Iodm and BTC Health
Assuming the 90 days trading horizon Iodm is expected to under-perform the BTC Health. But the stock apears to be less risky and, when comparing its historical volatility, Iodm is 1.39 times less risky than BTC Health. The stock trades about -0.06 of its potential returns per unit of risk. The BTC Health Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5.10 in BTC Health Limited on November 3, 2024 and sell it today you would earn a total of 0.40 from holding BTC Health Limited or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iodm vs. BTC Health Limited
Performance |
| Timeline |
| Iodm |
| BTC Health Limited |
Iodm and BTC Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iodm and BTC Health
The main advantage of trading using opposite Iodm and BTC Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iodm position performs unexpectedly, BTC Health 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 BTC Health will offset losses from the drop in BTC Health's long position.| Iodm vs. The Environmental Group | Iodm vs. Phoslock Environmental Technologies | Iodm vs. Beam Communications Holdings | Iodm vs. Mayfield Childcare |
| BTC Health vs. Kkr Credit Income | BTC Health vs. Wt Financial Group | BTC Health vs. Bank of Queensland | BTC Health vs. Aussie Broadband |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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