Correlation Between BITM and VINCI
Can any of the company-specific risk be diversified away by investing in both BITM and VINCI 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 BITM and VINCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BITM and VINCI, you can compare the effects of market volatilities on BITM and VINCI 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 BITM with a short position of VINCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of BITM and VINCI.
Diversification Opportunities for BITM and VINCI
Poor diversification
The 3 months correlation between BITM and VINCI is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding BITM and VINCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VINCI and BITM 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 BITM are associated (or correlated) with VINCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VINCI has no effect on the direction of BITM i.e., BITM and VINCI go up and down completely randomly.
Pair Corralation between BITM and VINCI
If you would invest 860.00 in VINCI on September 4, 2024 and sell it today you would earn a total of 337.00 from holding VINCI or generate 39.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
BITM vs. VINCI
Performance |
| Timeline |
| BITM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| VINCI |
BITM and VINCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BITM and VINCI
The main advantage of trading using opposite BITM and VINCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BITM position performs unexpectedly, VINCI 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 VINCI will offset losses from the drop in VINCI's long position.The idea behind BITM and VINCI 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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