Correlation Between Technology One and BTC Health
Can any of the company-specific risk be diversified away by investing in both Technology One 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 Technology One and BTC Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technology One and BTC Health Limited, you can compare the effects of market volatilities on Technology One 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 Technology One with a short position of BTC Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technology One and BTC Health.
Diversification Opportunities for Technology One and BTC Health
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Technology and BTC is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Technology One 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 Technology One 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 Technology One 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 Technology One i.e., Technology One and BTC Health go up and down completely randomly.
Pair Corralation between Technology One and BTC Health
Assuming the 90 days trading horizon Technology One is expected to generate 0.45 times more return on investment than BTC Health. However, Technology One is 2.23 times less risky than BTC Health. It trades about 0.17 of its potential returns per unit of risk. BTC Health Limited is currently generating about 0.07 per unit of risk. If you would invest 2,400 in Technology One on October 17, 2024 and sell it today you would earn a total of 503.00 from holding Technology One or generate 20.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Technology One vs. BTC Health Limited
Performance |
| Timeline |
| Technology One |
| BTC Health Limited |
Technology One and BTC Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technology One and BTC Health
The main advantage of trading using opposite Technology One and BTC Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technology One 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.| Technology One vs. Mirrabooka Investments | Technology One vs. Clime Investment Management | Technology One vs. Ainsworth Game Technology | Technology One vs. Mayfield Childcare |
| BTC Health vs. Air New Zealand | BTC Health vs. Technology One | BTC Health vs. Mach7 Technologies | BTC Health vs. Maggie Beer Holdings |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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