Correlation Between Vior and BTU Metals

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

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

Diversification Opportunities for Vior and BTU Metals

-0.86

Correlation Coefficient

Vior  BTU Metals

Pay attention - limited upside

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

Pair Corralation between Vior and BTU Metals

Assuming the 90 days horizon Vior Inc is expected to under-perform the BTU Metals. In addition to that, Vior is 5.28 times more volatile than BTU Metals Corp. It trades about -0.08 of its total potential returns per unit of risk. BTU Metals Corp is currently generating about 0.21 per unit of volatility. If you would invest  1.91  in BTU Metals Corp on September 4, 2024 and sell it today you would earn a total of  0.14  from holding BTU Metals Corp or generate 7.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Vior Inc  vs.  BTU Metals Corp

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.

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.

Pair Trading with Vior and BTU Metals

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

The idea behind Vior Inc and BTU Metals Corp 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 CEOs Directory module to screen CEOs from public companies around the world.