Correlation Between Birchtech Corp and Aftermath Silver

Can any of the company-specific risk be diversified away by investing in both Birchtech Corp and Aftermath Silver 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 Birchtech Corp and Aftermath Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Birchtech Corp and Aftermath Silver, you can compare the effects of market volatilities on Birchtech Corp and Aftermath Silver 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 Birchtech Corp with a short position of Aftermath Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birchtech Corp and Aftermath Silver.

Diversification Opportunities for Birchtech Corp and Aftermath Silver

-0.31

Correlation Coefficient

Birchtech Corp  Aftermath Silver

Very good diversification

The 3 months correlation between Birchtech and Aftermath is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Birchtech Corp and Aftermath Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aftermath Silver and Birchtech Corp 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 Birchtech Corp are associated (or correlated) with Aftermath Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aftermath Silver has no effect on the direction of Birchtech Corp i.e., Birchtech Corp and Aftermath Silver go up and down completely randomly.

Pair Corralation between Birchtech Corp and Aftermath Silver

Assuming the 90 days trading horizon Birchtech Corp is expected to under-perform the Aftermath Silver. But the stock apears to be less risky and, when comparing its historical volatility, Birchtech Corp is 1.27 times less risky than Aftermath Silver. The stock trades about -0.14 of its potential returns per unit of risk. The Aftermath Silver is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  45.00  in Aftermath Silver on September 21, 2024 and sell it today you would lose (6.00) from holding Aftermath Silver or give up 13.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	49.21%
Values	Daily Returns

Birchtech Corp  vs.  Aftermath Silver

Birchtech Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Birchtech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Aftermath Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aftermath Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Aftermath Silver is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Birchtech Corp and Aftermath Silver

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

The idea behind Birchtech Corp and Aftermath Silver 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.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.