Correlation Between Bitcoin and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both Bitcoin and USWE SPORTS 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 and USWE SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and USWE SPORTS AB, you can compare the effects of market volatilities on Bitcoin and USWE SPORTS 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 USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and USWE SPORTS.
Diversification Opportunities for Bitcoin and USWE SPORTS
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bitcoin and USWE is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB 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 USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of Bitcoin i.e., Bitcoin and USWE SPORTS go up and down completely randomly.
Pair Corralation between Bitcoin and USWE SPORTS
Assuming the 90 days trading horizon Bitcoin is expected to generate 2.04 times more return on investment than USWE SPORTS. However, Bitcoin is 2.04 times more volatile than USWE SPORTS AB. It trades about 0.08 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about -0.02 per unit of risk. If you would invest 2,312,970 in Bitcoin on October 19, 2024 and sell it today you would earn a total of 7,686,172 from holding Bitcoin or generate 332.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 59.48% |
Values | Daily Returns |
Bitcoin vs. USWE SPORTS AB
Performance |
Timeline |
Bitcoin |
USWE SPORTS AB |
Bitcoin and USWE SPORTS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bitcoin and USWE SPORTS
The main advantage of trading using opposite Bitcoin and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.The idea behind Bitcoin and USWE SPORTS AB 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.USWE SPORTS vs. Cincinnati Financial Corp | USWE SPORTS vs. UNIQA INSURANCE GR | USWE SPORTS vs. STORE ELECTRONIC | USWE SPORTS vs. LPKF Laser Electronics |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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