Correlation Between BTU Metals and Vior

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

Diversification Opportunities for BTU Metals and Vior

-0.86

Correlation Coefficient

BTU Metals  Vior

Pay attention - limited upside

The 3 months correlation between BTU and Vior is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding BTU Metals Corp and Vior Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vior Inc 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 Vior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vior Inc has no effect on the direction of BTU Metals i.e., BTU Metals and Vior go up and down completely randomly.

Pair Corralation between BTU Metals and Vior

Assuming the 90 days horizon BTU Metals Corp is expected to under-perform the Vior. But the otc stock apears to be less risky and, when comparing its historical volatility, BTU Metals Corp is 1.84 times less risky than Vior. The otc stock trades about -0.16 of its potential returns per unit of risk. The Vior Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  9.30  in Vior Inc on September 4, 2024 and sell it today you would earn a total of  3.70  from holding Vior Inc or generate 39.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

BTU Metals Corp  vs.  Vior Inc

BTU Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BTU Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Vior Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vior Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Vior reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BTU Metals and Vior

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

The idea behind BTU Metals Corp and Vior Inc 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.