Correlation Between Bit Digital and Xp
Can any of the company-specific risk be diversified away by investing in both Bit Digital 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 Bit Digital and Xp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bit Digital and Xp Inc, you can compare the effects of market volatilities on Bit Digital 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 Bit Digital with a short position of Xp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bit Digital and Xp.
Diversification Opportunities for Bit Digital and Xp
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bit and Xp is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bit Digital and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc 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 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 Bit Digital i.e., Bit Digital and Xp go up and down completely randomly.
Pair Corralation between Bit Digital and Xp
Given the investment horizon of 90 days Bit Digital is expected to generate 3.73 times more return on investment than Xp. However, Bit Digital is 3.73 times more volatile than Xp Inc. It trades about 0.03 of its potential returns per unit of risk. Xp Inc is currently generating about -0.23 per unit of risk. If you would invest 431.00 in Bit Digital on August 28, 2024 and sell it today you would lose (6.00) from holding Bit Digital or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bit Digital vs. Xp Inc
Performance |
| Timeline |
| Bit Digital |
| Xp Inc |
Bit Digital and Xp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bit Digital and Xp
The main advantage of trading using opposite Bit Digital and Xp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bit Digital 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.| Bit Digital vs. Scully Royalty | Bit Digital vs. Donnelley Financial Solutions | Bit Digital vs. Heritage Global | Bit Digital vs. Oppenheimer Holdings |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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