Correlation Between Wt Financial and BTC Health

Can any of the company-specific risk be diversified away by investing in both Wt Financial and BTC Health 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 Wt Financial and BTC Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wt Financial Group and BTC Health Limited, you can compare the effects of market volatilities on Wt Financial and BTC Health 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 Wt Financial with a short position of BTC Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wt Financial and BTC Health.

Diversification Opportunities for Wt Financial and BTC Health

-0.33

Correlation Coefficient

Wt Financial  BTC Health

Very good diversification

The 3 months correlation between WTL and BTC is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Wt Financial Group and BTC Health Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTC Health Limited and Wt Financial 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 Wt Financial Group are associated (or correlated) with BTC Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTC Health Limited has no effect on the direction of Wt Financial i.e., Wt Financial and BTC Health go up and down completely randomly.

Pair Corralation between Wt Financial and BTC Health

Assuming the 90 days trading horizon Wt Financial Group is expected to generate 0.44 times more return on investment than BTC Health. However, Wt Financial Group is 2.26 times less risky than BTC Health. It trades about 0.1 of its potential returns per unit of risk. BTC Health Limited is currently generating about -0.22 per unit of risk. If you would invest  9.50  in Wt Financial Group on October 27, 2024 and sell it today you would earn a total of  0.50  from holding Wt Financial Group or generate 5.26% return on investment over 90 days.

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

Wt Financial Group  vs.  BTC Health Limited

Wt Financial Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wt Financial Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Wt Financial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Wt Financial and BTC Health

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

The idea behind Wt Financial Group and BTC Health Limited 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 Global Correlations module to find global opportunities by holding instruments from different markets.