Correlation Between Bitfarms and Xp
Can any of the company-specific risk be diversified away by investing in both Bitfarms and Xp 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 Bitfarms and Xp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitfarms and Xp Inc, you can compare the effects of market volatilities on Bitfarms and Xp 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 Bitfarms with a short position of Xp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitfarms and Xp.
Diversification Opportunities for Bitfarms and Xp
Significant diversification
The 3 months correlation between Bitfarms and Xp is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bitfarms and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc and Bitfarms 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 Bitfarms are associated (or correlated) with Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of Bitfarms i.e., Bitfarms and Xp go up and down completely randomly.
Pair Corralation between Bitfarms and Xp
Given the investment horizon of 90 days Bitfarms is expected to generate 3.38 times more return on investment than Xp. However, Bitfarms is 3.38 times more volatile than Xp Inc. It trades about 0.07 of its potential returns per unit of risk. Xp Inc is currently generating about -0.2 per unit of risk. If you would invest 197.00 in Bitfarms on August 24, 2024 and sell it today you would earn a total of 14.00 from holding Bitfarms or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitfarms vs. Xp Inc
Performance |
| Timeline |
| Bitfarms |
| Xp Inc |
Bitfarms and Xp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitfarms and Xp
The main advantage of trading using opposite Bitfarms and Xp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitfarms position performs unexpectedly, Xp 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 Xp will offset losses from the drop in Xp's long position.| Bitfarms vs. HIVE Blockchain Technologies | Bitfarms vs. CleanSpark | Bitfarms vs. Marathon Digital Holdings | Bitfarms vs. Riot Blockchain |
| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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