Correlation Between BTU Metals and Brunswick Exploration
Can any of the company-specific risk be diversified away by investing in both BTU Metals and Brunswick Exploration 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 BTU Metals and Brunswick Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTU Metals Corp and Brunswick Exploration, you can compare the effects of market volatilities on BTU Metals and Brunswick Exploration 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 BTU Metals with a short position of Brunswick Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTU Metals and Brunswick Exploration.
Diversification Opportunities for BTU Metals and Brunswick Exploration
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BTU and Brunswick is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp and Brunswick Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick Exploration and BTU Metals 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 BTU Metals Corp are associated (or correlated) with Brunswick Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick Exploration has no effect on the direction of BTU Metals i.e., BTU Metals and Brunswick Exploration go up and down completely randomly.
Pair Corralation between BTU Metals and Brunswick Exploration
Assuming the 90 days horizon BTU Metals Corp is expected to generate 0.67 times more return on investment than Brunswick Exploration. However, BTU Metals Corp is 1.5 times less risky than Brunswick Exploration. It trades about 0.22 of its potential returns per unit of risk. Brunswick Exploration is currently generating about -0.17 per unit of risk. If you would invest 2.00 in BTU Metals Corp on December 1, 2024 and sell it today you would earn a total of 0.27 from holding BTU Metals Corp or generate 13.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
BTU Metals Corp vs. Brunswick Exploration
Performance |
Timeline |
BTU Metals Corp |
Brunswick Exploration |
BTU Metals and Brunswick Exploration Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BTU Metals and Brunswick Exploration
The main advantage of trading using opposite BTU Metals and Brunswick Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTU Metals position performs unexpectedly, Brunswick Exploration 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 Brunswick Exploration will offset losses from the drop in Brunswick Exploration's long position.BTU Metals vs. Alto Ingredients | BTU Metals vs. Ecovyst | BTU Metals vs. Balchem | BTU Metals vs. Sealed Air |
Brunswick Exploration vs. Heliostar Metals | Brunswick Exploration vs. Independence Gold Corp | Brunswick Exploration vs. Westward Gold | Brunswick Exploration vs. Snowline Gold Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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