Correlation Between Birchtech Corp and Metalero Mining

Can any of the company-specific risk be diversified away by investing in both Birchtech Corp and Metalero Mining 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 Birchtech Corp and Metalero Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Birchtech Corp and Metalero Mining Corp, you can compare the effects of market volatilities on Birchtech Corp and Metalero Mining 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 Birchtech Corp with a short position of Metalero Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birchtech Corp and Metalero Mining.

Diversification Opportunities for Birchtech Corp and Metalero Mining

0.18

Correlation Coefficient

Birchtech Corp  Metalero Mining

Average diversification

The 3 months correlation between Birchtech and Metalero is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Birchtech Corp and Metalero Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalero Mining Corp and Birchtech Corp 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 Birchtech Corp are associated (or correlated) with Metalero Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalero Mining Corp has no effect on the direction of Birchtech Corp i.e., Birchtech Corp and Metalero Mining go up and down completely randomly.

Pair Corralation between Birchtech Corp and Metalero Mining

Assuming the 90 days trading horizon Birchtech Corp is expected to under-perform the Metalero Mining. In addition to that, Birchtech Corp is 1.16 times more volatile than Metalero Mining Corp. It trades about -0.09 of its total potential returns per unit of risk. Metalero Mining Corp is currently generating about -0.01 per unit of volatility. If you would invest  14.00  in Metalero Mining Corp on December 5, 2024 and sell it today you would lose (2.00) from holding Metalero Mining Corp or give up 14.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	65.85%
Values	Daily Returns

Birchtech Corp  vs.  Metalero Mining Corp

Birchtech Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Birchtech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Metalero Mining Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Metalero Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Birchtech Corp and Metalero Mining

The main advantage of trading using opposite Birchtech Corp and Metalero Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birchtech Corp position performs unexpectedly, Metalero Mining 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 Metalero Mining will offset losses from the drop in Metalero Mining's long position.

The idea behind Birchtech Corp and Metalero Mining Corp 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.