Correlation Between BTC Health and Bank of Queensland
Can any of the company-specific risk be diversified away by investing in both BTC Health and Bank of Queensland 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 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 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Health and Bank of Queensland.
Diversification Opportunities for BTC Health and Bank of Queensland
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BTC and Bank is 0.09. 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 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. 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 has no effect on the direction of BTC Health i.e., BTC Health and Bank of Queensland go up and down completely randomly.
Pair Corralation between BTC Health and Bank of Queensland
Assuming the 90 days trading horizon BTC Health Limited is expected to generate 16.57 times more return on investment than Bank of Queensland. However, BTC Health is 16.57 times more volatile than Bank of Queensland. It trades about 0.25 of its potential returns per unit of risk. Bank of Queensland is currently generating about 0.17 per unit of risk. If you would invest 5.90 in BTC Health Limited on October 11, 2024 and sell it today you would earn a total of 1.50 from holding BTC Health Limited or generate 25.42% return on investment 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
Performance |
Timeline |
BTC Health Limited |
Bank of Queensland |
BTC Health and Bank of Queensland Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BTC Health and Bank of Queensland
The main advantage of trading using opposite BTC Health and Bank of Queensland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Health position performs unexpectedly, Bank of Queensland 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 will offset losses from the drop in Bank of Queensland's long position.BTC Health vs. Bank of Queensland | BTC Health vs. Pioneer Credit | BTC Health vs. Liberty Financial Group | BTC Health vs. EROAD |
Bank of Queensland vs. Infomedia | Bank of Queensland vs. Star Entertainment Group | Bank of Queensland vs. Perseus Mining | Bank of Queensland vs. Torque Metals |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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