Correlation Between Bit Digital and Futu Holdings
Can any of the company-specific risk be diversified away by investing in both Bit Digital and Futu Holdings 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 Bit Digital and Futu Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bit Digital and Futu Holdings, you can compare the effects of market volatilities on Bit Digital and Futu Holdings 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 Bit Digital with a short position of Futu Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bit Digital and Futu Holdings.
Diversification Opportunities for Bit Digital and Futu Holdings
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bit and Futu is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bit Digital and Futu Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futu Holdings and Bit Digital 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 Bit Digital are associated (or correlated) with Futu Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futu Holdings has no effect on the direction of Bit Digital i.e., Bit Digital and Futu Holdings go up and down completely randomly.
Pair Corralation between Bit Digital and Futu Holdings
Given the investment horizon of 90 days Bit Digital is expected to generate 2.84 times less return on investment than Futu Holdings. In addition to that, Bit Digital is 2.05 times more volatile than Futu Holdings. It trades about 0.06 of its total potential returns per unit of risk. Futu Holdings is currently generating about 0.37 per unit of volatility. If you would invest 7,946 in Futu Holdings on November 2, 2024 and sell it today you would earn a total of 2,073 from holding Futu Holdings or generate 26.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bit Digital vs. Futu Holdings
Performance |
| Timeline |
| Bit Digital |
| Futu Holdings |
Bit Digital and Futu Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bit Digital and Futu Holdings
The main advantage of trading using opposite Bit Digital and Futu Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bit Digital position performs unexpectedly, Futu Holdings 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 Futu Holdings will offset losses from the drop in Futu Holdings' long position.| Bit Digital vs. Hut 8 Corp | Bit Digital vs. HIVE Blockchain Technologies | Bit Digital vs. CleanSpark | Bit Digital vs. Terawulf |
| Futu Holdings vs. Bit Digital | Futu Holdings vs. Xp Inc | Futu Holdings vs. Magic Empire Global | Futu Holdings vs. Applied Digital |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stocks Directory Find actively traded stocks across global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |