Correlation Between BIT Computer and Ecocab
Can any of the company-specific risk be diversified away by investing in both BIT Computer and Ecocab 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 BIT Computer and Ecocab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIT Computer Co and Ecocab Co, you can compare the effects of market volatilities on BIT Computer and Ecocab 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 BIT Computer with a short position of Ecocab. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIT Computer and Ecocab.
Diversification Opportunities for BIT Computer and Ecocab
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BIT and Ecocab is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding BIT Computer Co and Ecocab Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecocab and BIT Computer 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 BIT Computer Co are associated (or correlated) with Ecocab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecocab has no effect on the direction of BIT Computer i.e., BIT Computer and Ecocab go up and down completely randomly.
Pair Corralation between BIT Computer and Ecocab
Assuming the 90 days trading horizon BIT Computer Co is expected to generate 0.79 times more return on investment than Ecocab. However, BIT Computer Co is 1.27 times less risky than Ecocab. It trades about 0.0 of its potential returns per unit of risk. Ecocab Co is currently generating about -0.04 per unit of risk. If you would invest 603,523 in BIT Computer Co on September 13, 2024 and sell it today you would lose (105,523) from holding BIT Computer Co or give up 17.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIT Computer Co vs. Ecocab Co
Performance |
| Timeline |
| BIT Computer |
| Ecocab |
BIT Computer and Ecocab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIT Computer and Ecocab
The main advantage of trading using opposite BIT Computer and Ecocab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIT Computer position performs unexpectedly, Ecocab 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 Ecocab will offset losses from the drop in Ecocab's long position.| BIT Computer vs. Ssangyong Information Communication | BIT Computer vs. Eugene Technology CoLtd | BIT Computer vs. Koh Young Technology | BIT Computer vs. Daou Technology |
| Ecocab vs. LG Display Co | Ecocab vs. BIT Computer Co | Ecocab vs. Shinsegae Information Communication | Ecocab vs. Polaris Office Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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