Correlation Between BTC Health and Carnegie Clean

Can any of the company-specific risk be diversified away by investing in both BTC Health and Carnegie Clean 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 Carnegie Clean 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 Carnegie Clean Energy, you can compare the effects of market volatilities on BTC Health and Carnegie Clean 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 Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Health and Carnegie Clean.

Diversification Opportunities for BTC Health and Carnegie Clean

-0.59

Correlation Coefficient

BTC Health  Carnegie Clean

Excellent diversification

The 3 months correlation between BTC and Carnegie is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and Carnegie Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Clean Energy 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 Carnegie Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Clean Energy has no effect on the direction of BTC Health i.e., BTC Health and Carnegie Clean go up and down completely randomly.

Pair Corralation between BTC Health and Carnegie Clean

Assuming the 90 days trading horizon BTC Health is expected to generate 10.42 times less return on investment than Carnegie Clean. But when comparing it to its historical volatility, BTC Health Limited is 4.32 times less risky than Carnegie Clean. It trades about 0.04 of its potential returns per unit of risk. Carnegie Clean Energy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  7.50  in Carnegie Clean Energy on October 22, 2024 and sell it today you would lose (3.80) from holding Carnegie Clean Energy or give up 50.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BTC Health Limited  vs.  Carnegie Clean Energy

BTC Health Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BTC Health Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Carnegie Clean Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carnegie Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Carnegie Clean 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 Carnegie Clean

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

The idea behind BTC Health Limited and Carnegie Clean Energy 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.