Correlation Between Biglari Holdings and BTC Digital
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and BTC Digital 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 Biglari Holdings and BTC Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and BTC Digital, you can compare the effects of market volatilities on Biglari Holdings and BTC Digital 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 Biglari Holdings with a short position of BTC Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and BTC Digital.
Diversification Opportunities for Biglari Holdings and BTC Digital
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Biglari and BTC is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and BTC Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTC Digital and Biglari Holdings 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 Biglari Holdings are associated (or correlated) with BTC Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTC Digital has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and BTC Digital go up and down completely randomly.
Pair Corralation between Biglari Holdings and BTC Digital
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 32.86 times less return on investment than BTC Digital. But when comparing it to its historical volatility, Biglari Holdings is 14.3 times less risky than BTC Digital. It trades about 0.05 of its potential returns per unit of risk. BTC Digital is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3.62 in BTC Digital on August 30, 2024 and sell it today you would earn a total of 4.26 from holding BTC Digital or generate 117.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 78.38% |
| Values | Daily Returns |
Biglari Holdings vs. BTC Digital
Performance |
| Timeline |
| Biglari Holdings |
| BTC Digital |
Biglari Holdings and BTC Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and BTC Digital
The main advantage of trading using opposite Biglari Holdings and BTC Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, BTC Digital 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 BTC Digital will offset losses from the drop in BTC Digital's long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| BTC Digital vs. Gaotu Techedu DRC | BTC Digital vs. TAL Education Group | BTC Digital vs. Strategic Education | BTC Digital vs. Vasta Platform |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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