Correlation Between Stelar Metals and BTC Health
Can any of the company-specific risk be diversified away by investing in both Stelar Metals 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 Stelar Metals and BTC Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and BTC Health Limited, you can compare the effects of market volatilities on Stelar Metals 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 Stelar Metals with a short position of BTC Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and BTC Health.
Diversification Opportunities for Stelar Metals and BTC Health
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Stelar and BTC is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals 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 Stelar 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 Stelar Metals 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 Stelar Metals i.e., Stelar Metals and BTC Health go up and down completely randomly.
Pair Corralation between Stelar Metals and BTC Health
Assuming the 90 days trading horizon Stelar Metals is expected to generate 3.69 times less return on investment than BTC Health. In addition to that, Stelar Metals is 1.26 times more volatile than BTC Health Limited. It trades about 0.01 of its total potential returns per unit of risk. BTC Health Limited is currently generating about 0.06 per unit of volatility. If you would invest 4.60 in BTC Health Limited on August 29, 2024 and sell it today you would earn a total of 0.90 from holding BTC Health Limited or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. BTC Health Limited
Performance |
| Timeline |
| Stelar Metals |
| BTC Health Limited |
Stelar Metals and BTC Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and BTC Health
The main advantage of trading using opposite Stelar Metals and BTC Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals 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.| Stelar Metals vs. Northern Star Resources | Stelar Metals vs. Evolution Mining | Stelar Metals vs. Bluescope Steel | Stelar Metals vs. Sandfire Resources NL |
| BTC Health vs. Westpac Banking | BTC Health vs. Champion Iron | BTC Health vs. Ridley | BTC Health vs. Peel Mining |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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