Correlation Between Bitcoin and Nanning Chemical
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By analyzing existing cross correlation between Bitcoin and Nanning Chemical Industry, you can compare the effects of market volatilities on Bitcoin and Nanning Chemical 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 with a short position of Nanning Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Nanning Chemical.
Diversification Opportunities for Bitcoin and Nanning Chemical
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bitcoin and Nanning is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Nanning Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanning Chemical Industry and Bitcoin 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 are associated (or correlated) with Nanning Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanning Chemical Industry has no effect on the direction of Bitcoin i.e., Bitcoin and Nanning Chemical go up and down completely randomly.
Pair Corralation between Bitcoin and Nanning Chemical
Assuming the 90 days trading horizon Bitcoin is expected to generate 2.73 times more return on investment than Nanning Chemical. However, Bitcoin is 2.73 times more volatile than Nanning Chemical Industry. It trades about 0.09 of its potential returns per unit of risk. Nanning Chemical Industry is currently generating about 0.02 per unit of risk. If you would invest 2,325,278 in Bitcoin on October 27, 2024 and sell it today you would earn a total of 8,135,722 from holding Bitcoin or generate 349.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 61.83% |
| Values | Daily Returns |
Bitcoin vs. Nanning Chemical Industry
Performance |
| Timeline |
| Bitcoin |
| Nanning Chemical Industry |
Bitcoin and Nanning Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Nanning Chemical
The main advantage of trading using opposite Bitcoin and Nanning Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Nanning Chemical 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 Nanning Chemical will offset losses from the drop in Nanning Chemical's long position.The idea behind Bitcoin and Nanning Chemical Industry 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.| Nanning Chemical vs. China Publishing Media | Nanning Chemical vs. Heilongjiang Publishing Media | Nanning Chemical vs. MayAir Technology Co | Nanning Chemical vs. Thinkingdom Media Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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