Correlation Between BCPT and Worldcoin
Can any of the company-specific risk be diversified away by investing in both BCPT and Worldcoin 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 BCPT and Worldcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCPT and Worldcoin, you can compare the effects of market volatilities on BCPT and Worldcoin 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 BCPT with a short position of Worldcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCPT and Worldcoin.
Diversification Opportunities for BCPT and Worldcoin
Poor diversification
The 3 months correlation between BCPT and Worldcoin is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BCPT and Worldcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldcoin and BCPT 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 BCPT are associated (or correlated) with Worldcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldcoin has no effect on the direction of BCPT i.e., BCPT and Worldcoin go up and down completely randomly.
Pair Corralation between BCPT and Worldcoin
Assuming the 90 days trading horizon BCPT is expected to generate 0.38 times more return on investment than Worldcoin. However, BCPT is 2.64 times less risky than Worldcoin. It trades about 0.1 of its potential returns per unit of risk. Worldcoin is currently generating about 0.0 per unit of risk. If you would invest 0.20 in BCPT on August 30, 2024 and sell it today you would earn a total of 0.08 from holding BCPT or generate 41.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCPT vs. Worldcoin
Performance |
| Timeline |
| BCPT |
| Worldcoin |
BCPT and Worldcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCPT and Worldcoin
The main advantage of trading using opposite BCPT and Worldcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCPT position performs unexpectedly, Worldcoin 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 Worldcoin will offset losses from the drop in Worldcoin's long position.The idea behind BCPT and Worldcoin 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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