Correlation Between BTC Health and Great Northern

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

Diversification Opportunities for BTC Health and Great Northern

-0.12

Correlation Coefficient

BTC Health  Great Northern

Good diversification

The 3 months correlation between BTC and Great is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and Great Northern Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Northern Minerals 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 Great Northern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Northern Minerals has no effect on the direction of BTC Health i.e., BTC Health and Great Northern go up and down completely randomly.

Pair Corralation between BTC Health and Great Northern

Assuming the 90 days trading horizon BTC Health Limited is expected to under-perform the Great Northern. But the stock apears to be less risky and, when comparing its historical volatility, BTC Health Limited is 1.42 times less risky than Great Northern. The stock trades about -0.06 of its potential returns per unit of risk. The Great Northern Minerals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1.40  in Great Northern Minerals on December 20, 2024 and sell it today you would lose (0.10) from holding Great Northern Minerals or give up 7.14% of portfolio value over 90 days.

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

BTC Health Limited  vs.  Great Northern Minerals

BTC Health Limited

Risk-Adjusted Performance

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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Great Northern Minerals

Risk-Adjusted Performance

Weak

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

Pair Trading with BTC Health and Great Northern

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

The idea behind BTC Health Limited and Great Northern Minerals 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.