Correlation Between Minerals Technologies and BK Technologies
Can any of the company-specific risk be diversified away by investing in both Minerals Technologies and BK Technologies 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 Minerals Technologies and BK Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minerals Technologies and BK Technologies, you can compare the effects of market volatilities on Minerals Technologies and BK Technologies 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 Minerals Technologies with a short position of BK Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minerals Technologies and BK Technologies.
Diversification Opportunities for Minerals Technologies and BK Technologies
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Minerals and BKTI is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies and BK Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BK Technologies and Minerals Technologies 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 Minerals Technologies are associated (or correlated) with BK Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BK Technologies has no effect on the direction of Minerals Technologies i.e., Minerals Technologies and BK Technologies go up and down completely randomly.
Pair Corralation between Minerals Technologies and BK Technologies
Considering the 90-day investment horizon Minerals Technologies is expected to generate 6.89 times less return on investment than BK Technologies. But when comparing it to its historical volatility, Minerals Technologies is 2.76 times less risky than BK Technologies. It trades about 0.05 of its potential returns per unit of risk. BK Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,201 in BK Technologies on February 2, 2024 and sell it today you would earn a total of 250.00 from holding BK Technologies or generate 20.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Minerals Technologies vs. BK Technologies
Performance |
Timeline |
Minerals Technologies |
BK Technologies |
Minerals Technologies and BK Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Minerals Technologies and BK Technologies
The main advantage of trading using opposite Minerals Technologies and BK Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerals Technologies position performs unexpectedly, BK Technologies 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 BK Technologies will offset losses from the drop in BK Technologies' long position.Minerals Technologies vs. Quaker Chemical | Minerals Technologies vs. Cabot | Minerals Technologies vs. Oil Dri | Minerals Technologies vs. Orion Engineered Carbons |
BK Technologies vs. Aviat Networks | BK Technologies vs. AudioCodes | BK Technologies vs. Silicom | BK Technologies vs. Akoustis Technologies |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |