Correlation Between TeraGo and Birchtech Corp
Can any of the company-specific risk be diversified away by investing in both TeraGo and Birchtech Corp 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 TeraGo and Birchtech Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TeraGo Inc and Birchtech Corp, you can compare the effects of market volatilities on TeraGo and Birchtech Corp 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 TeraGo with a short position of Birchtech Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of TeraGo and Birchtech Corp.
Diversification Opportunities for TeraGo and Birchtech Corp
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TeraGo and Birchtech is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding TeraGo Inc and Birchtech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birchtech Corp and TeraGo 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 TeraGo Inc are associated (or correlated) with Birchtech Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birchtech Corp has no effect on the direction of TeraGo i.e., TeraGo and Birchtech Corp go up and down completely randomly.
Pair Corralation between TeraGo and Birchtech Corp
Assuming the 90 days trading horizon TeraGo Inc is expected to under-perform the Birchtech Corp. But the stock apears to be less risky and, when comparing its historical volatility, TeraGo Inc is 1.49 times less risky than Birchtech Corp. The stock trades about -0.58 of its potential returns per unit of risk. The Birchtech Corp is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 98.00 in Birchtech Corp on August 27, 2024 and sell it today you would lose (8.00) from holding Birchtech Corp or give up 8.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 61.9% |
| Values | Daily Returns |
TeraGo Inc vs. Birchtech Corp
Performance |
| Timeline |
| TeraGo Inc |
| Birchtech Corp |
TeraGo and Birchtech Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TeraGo and Birchtech Corp
The main advantage of trading using opposite TeraGo and Birchtech Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TeraGo position performs unexpectedly, Birchtech Corp 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 Birchtech Corp will offset losses from the drop in Birchtech Corp's long position.| TeraGo vs. Alphabet Inc CDR | TeraGo vs. Microsoft Corp CDR | TeraGo vs. NVIDIA CDR | TeraGo vs. Tesla Inc CDR |
| Birchtech Corp vs. NVIDIA CDR | Birchtech Corp vs. Apple Inc CDR | Birchtech Corp vs. Microsoft Corp CDR | Birchtech Corp vs. Alphabet Inc CDR |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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