Correlation Between BTC Health and Sayona Mining

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

Diversification Opportunities for BTC Health and Sayona Mining

0.42

Correlation Coefficient

BTC Health  Sayona Mining

Very weak diversification

The 3 months correlation between BTC and Sayona is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding BTC Health Limited and Sayona Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sayona Mining 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 Sayona Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sayona Mining has no effect on the direction of BTC Health i.e., BTC Health and Sayona Mining go up and down completely randomly.

Pair Corralation between BTC Health and Sayona Mining

Assuming the 90 days trading horizon BTC Health Limited is expected to under-perform the Sayona Mining. In addition to that, BTC Health is 1.38 times more volatile than Sayona Mining. It trades about -0.06 of its total potential returns per unit of risk. Sayona Mining is currently generating about -0.06 per unit of volatility. If you would invest  2.60  in Sayona Mining on December 20, 2024 and sell it today you would lose (0.50) from holding Sayona Mining or give up 19.23% of portfolio value over 90 days.

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

BTC Health Limited  vs.  Sayona Mining

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.

Sayona Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sayona Mining 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 basic 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.

Pair Trading with BTC Health and Sayona Mining

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

The idea behind BTC Health Limited and Sayona Mining 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 Transaction History module to view history of all your transactions and understand their impact on performance.