Correlation Between Bitcoin SV and Phala Network

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Can any of the company-specific risk be diversified away by investing in both Bitcoin SV and Phala Network 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 Bitcoin SV and Phala Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin SV and Phala Network, you can compare the effects of market volatilities on Bitcoin SV and Phala Network 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 Bitcoin SV with a short position of Phala Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin SV and Phala Network.

Diversification Opportunities for Bitcoin SV and Phala Network

BitcoinPhalaDiversified AwayBitcoinPhalaDiversified Away100%
-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between Bitcoin and Phala is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin SV and Phala Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phala Network and Bitcoin SV 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 Bitcoin SV are associated (or correlated) with Phala Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phala Network has no effect on the direction of Bitcoin SV i.e., Bitcoin SV and Phala Network go up and down completely randomly.

Pair Corralation between Bitcoin SV and Phala Network

Assuming the 90 days trading horizon Bitcoin SV is expected to generate 0.59 times more return on investment than Phala Network. However, Bitcoin SV is 1.7 times less risky than Phala Network. It trades about -0.38 of its potential returns per unit of risk. Phala Network is currently generating about -0.32 per unit of risk. If you would invest  5,296  in Bitcoin SV on November 21, 2024 and sell it today you would lose (1,562) from holding Bitcoin SV or give up 29.49% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Bitcoin SV  vs.  Phala Network

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50050100150200250
JavaScript chart by amCharts 3.21.15BSV PHA
       Timeline  
Bitcoin SV 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Bitcoin SV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for Bitcoin SV shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb4050607080
Phala Network 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Phala Network are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Phala Network exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.20.30.40.50.6

Bitcoin SV and Phala Network Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.01-7.5-4.99-2.470.02.214.416.628.82 0.0020.0040.0060.0080.0100.012
JavaScript chart by amCharts 3.21.15BSV PHA
       Returns  

Pair Trading with Bitcoin SV and Phala Network

The main advantage of trading using opposite Bitcoin SV and Phala Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin SV position performs unexpectedly, Phala Network 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 Phala Network will offset losses from the drop in Phala Network's long position.
The idea behind Bitcoin SV and Phala Network 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.
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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