Correlation Between BTC Health and Bank Of Queensland Ltd

Can any of the company-specific risk be diversified away by investing in both BTC Health and Bank Of Queensland Ltd 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 BTC Health and Bank Of Queensland Ltd into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BTC Health Limited and Bank Of Queensland, you can compare the effects of market volatilities on BTC Health and Bank Of Queensland Ltd 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 BTC Health with a short position of Bank Of Queensland Ltd. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Health and Bank Of Queensland Ltd.

Diversification Opportunities for BTC Health and Bank Of Queensland Ltd

0.03

Correlation Coefficient

BTC Health  Bank Of Queensland Ltd

Significant diversification

The 3 months correlation between BTC and Bank is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and Bank Of Queensland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Of Queensland Ltd and BTC Health 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 BTC Health Limited are associated (or correlated) with Bank Of Queensland Ltd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Of Queensland Ltd has no effect on the direction of BTC Health i.e., BTC Health and Bank Of Queensland Ltd go up and down completely randomly.

Pair Corralation between BTC Health and Bank Of Queensland Ltd

Assuming the 90 days trading horizon BTC Health Limited is expected to generate 8.18 times more return on investment than Bank Of Queensland Ltd. However, BTC Health is 8.18 times more volatile than Bank Of Queensland. It trades about 0.02 of its potential returns per unit of risk. Bank Of Queensland is currently generating about 0.02 per unit of risk. If you would invest  7.30  in BTC Health Limited on December 28, 2024 and sell it today you would lose (0.80) from holding BTC Health Limited or give up 10.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BTC Health Limited  vs.  Bank Of Queensland

BTC Health Limited

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BTC Health Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, BTC Health may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bank Of Queensland Ltd

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Of Queensland are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bank Of Queensland Ltd is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BTC Health and Bank Of Queensland Ltd

The main advantage of trading using opposite BTC Health and Bank Of Queensland Ltd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Health position performs unexpectedly, Bank Of Queensland Ltd 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 Bank Of Queensland Ltd will offset losses from the drop in Bank Of Queensland Ltd's long position.

The idea behind BTC Health Limited and Bank Of Queensland 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.