Correlation Between Big Time and BounceBit
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By analyzing existing cross correlation between Big Time and BounceBit, you can compare the effects of market volatilities on Big Time and BounceBit 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 Big Time with a short position of BounceBit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Time and BounceBit.
Diversification Opportunities for Big Time and BounceBit
Poor diversification
The 3 months correlation between Big and BounceBit is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Big Time and BounceBit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BounceBit and Big Time 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 Big Time are associated (or correlated) with BounceBit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BounceBit has no effect on the direction of Big Time i.e., Big Time and BounceBit go up and down completely randomly.
Pair Corralation between Big Time and BounceBit
Assuming the 90 days trading horizon Big Time is expected to under-perform the BounceBit. But the crypto coin apears to be less risky and, when comparing its historical volatility, Big Time is 1.03 times less risky than BounceBit. The crypto coin trades about -0.47 of its potential returns per unit of risk. The BounceBit is currently generating about -0.45 of returns per unit of risk over similar time horizon. If you would invest 37.00 in BounceBit on November 8, 2024 and sell it today you would lose (20.00) from holding BounceBit or give up 54.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Time vs. BounceBit
Performance |
| Timeline |
| Big Time |
| BounceBit |
Big Time and BounceBit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Time and BounceBit
The main advantage of trading using opposite Big Time and BounceBit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Time position performs unexpectedly, BounceBit 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 BounceBit will offset losses from the drop in BounceBit's long position.The idea behind Big Time and BounceBit 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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