Correlation Between BitFrontier Capital and New Gold
Can any of the company-specific risk be diversified away by investing in both BitFrontier Capital and New Gold 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 BitFrontier Capital and New Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BitFrontier Capital Holdings and New Gold, you can compare the effects of market volatilities on BitFrontier Capital and New Gold 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 BitFrontier Capital with a short position of New Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of BitFrontier Capital and New Gold.
Diversification Opportunities for BitFrontier Capital and New Gold
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BitFrontier and New is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding BitFrontier Capital Holdings and New Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Gold and BitFrontier Capital 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 BitFrontier Capital Holdings are associated (or correlated) with New Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Gold has no effect on the direction of BitFrontier Capital i.e., BitFrontier Capital and New Gold go up and down completely randomly.
Pair Corralation between BitFrontier Capital and New Gold
Given the investment horizon of 90 days BitFrontier Capital Holdings is expected to generate 4.35 times more return on investment than New Gold. However, BitFrontier Capital is 4.35 times more volatile than New Gold. It trades about 0.03 of its potential returns per unit of risk. New Gold is currently generating about 0.1 per unit of risk. If you would invest 0.91 in BitFrontier Capital Holdings on August 25, 2024 and sell it today you would lose (0.64) from holding BitFrontier Capital Holdings or give up 70.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BitFrontier Capital Holdings vs. New Gold
Performance |
| Timeline |
| BitFrontier Capital |
| New Gold |
BitFrontier Capital and New Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BitFrontier Capital and New Gold
The main advantage of trading using opposite BitFrontier Capital and New Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BitFrontier Capital position performs unexpectedly, New Gold 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 New Gold will offset losses from the drop in New Gold's long position.| BitFrontier Capital vs. Morgan Stanley | BitFrontier Capital vs. Goldman Sachs Group | BitFrontier Capital vs. Charles Schwab Corp | BitFrontier Capital vs. Interactive Brokers Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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