Correlation Between Birchtech Corp and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Birchtech Corp and Canlan Ice 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 Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Birchtech Corp and Canlan Ice Sports, you can compare the effects of market volatilities on Birchtech Corp and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birchtech Corp and Canlan Ice.
Diversification Opportunities for Birchtech Corp and Canlan Ice
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Birchtech and Canlan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Birchtech Corp and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Birchtech Corp i.e., Birchtech Corp and Canlan Ice go up and down completely randomly.
Pair Corralation between Birchtech Corp and Canlan Ice
Assuming the 90 days trading horizon Birchtech Corp is expected to generate 1.55 times more return on investment than Canlan Ice. However, Birchtech Corp is 1.55 times more volatile than Canlan Ice Sports. It trades about 0.11 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.1 per unit of risk. If you would invest 69.00 in Birchtech Corp on April 23, 2025 and sell it today you would earn a total of 18.00 from holding Birchtech Corp or generate 26.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Birchtech Corp vs. Canlan Ice Sports
Performance |
Timeline |
Birchtech Corp |
Canlan Ice Sports |
Birchtech Corp and Canlan Ice Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Birchtech Corp and Canlan Ice
The main advantage of trading using opposite Birchtech Corp and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birchtech Corp position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.Birchtech Corp vs. Timbercreek Financial Corp | Birchtech Corp vs. Royal Bank of | Birchtech Corp vs. Mako Mining Corp | Birchtech Corp vs. US Financial 15 |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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