Correlation Between BCD and EMERCOIN
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By analyzing existing cross correlation between BCD and EMERCOIN, you can compare the effects of market volatilities on BCD and EMERCOIN 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 BCD with a short position of EMERCOIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCD and EMERCOIN.
Diversification Opportunities for BCD and EMERCOIN
Very weak diversification
The 3 months correlation between BCD and EMERCOIN is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding BCD and EMERCOIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMERCOIN and BCD 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 BCD are associated (or correlated) with EMERCOIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMERCOIN has no effect on the direction of BCD i.e., BCD and EMERCOIN go up and down completely randomly.
Pair Corralation between BCD and EMERCOIN
Assuming the 90 days trading horizon BCD is expected to generate 43.46 times less return on investment than EMERCOIN. But when comparing it to its historical volatility, BCD is 9.39 times less risky than EMERCOIN. It trades about 0.02 of its potential returns per unit of risk. EMERCOIN is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.00 in EMERCOIN on September 3, 2024 and sell it today you would earn a total of 1.47 from holding EMERCOIN or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 57.72% |
| Values | Daily Returns |
BCD vs. EMERCOIN
Performance |
| Timeline |
| BCD |
| EMERCOIN |
BCD and EMERCOIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCD and EMERCOIN
The main advantage of trading using opposite BCD and EMERCOIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCD position performs unexpectedly, EMERCOIN 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 EMERCOIN will offset losses from the drop in EMERCOIN's long position.The idea behind BCD and EMERCOIN 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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