Correlation Between BounceBit and REDLANG
Specify exactly 2 symbols:
By analyzing existing cross correlation between BounceBit and REDLANG, you can compare the effects of market volatilities on BounceBit and REDLANG 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 BounceBit with a short position of REDLANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BounceBit and REDLANG.
Diversification Opportunities for BounceBit and REDLANG
Poor diversification
The 3 months correlation between BounceBit and REDLANG is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding BounceBit and REDLANG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REDLANG and BounceBit 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 BounceBit are associated (or correlated) with REDLANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REDLANG has no effect on the direction of BounceBit i.e., BounceBit and REDLANG go up and down completely randomly.
Pair Corralation between BounceBit and REDLANG
Assuming the 90 days horizon BounceBit is expected to under-perform the REDLANG. But the crypto coin apears to be less risky and, when comparing its historical volatility, BounceBit is 1.42 times less risky than REDLANG. The crypto coin trades about -0.42 of its potential returns per unit of risk. The REDLANG is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 0.12 in REDLANG on November 10, 2024 and sell it today you would lose (0.04) from holding REDLANG or give up 30.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BounceBit vs. REDLANG
Performance |
| Timeline |
| BounceBit |
| REDLANG |
BounceBit and REDLANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BounceBit and REDLANG
The main advantage of trading using opposite BounceBit and REDLANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BounceBit position performs unexpectedly, REDLANG 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 REDLANG will offset losses from the drop in REDLANG's long position.The idea behind BounceBit and REDLANG 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.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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |