Correlation Between Bitcoin and BAG Films

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

Diversification Opportunities for Bitcoin and BAG Films

-0.37
  Correlation Coefficient

Very good diversification

The 3 months correlation between Bitcoin and BAG is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and BAG Films and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAG Films 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 BAG Films. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAG Films has no effect on the direction of Bitcoin i.e., Bitcoin and BAG Films go up and down completely randomly.

Pair Corralation between Bitcoin and BAG Films

Assuming the 90 days trading horizon Bitcoin is expected to generate 0.84 times more return on investment than BAG Films. However, Bitcoin is 1.2 times less risky than BAG Films. It trades about 0.19 of its potential returns per unit of risk. BAG Films and is currently generating about -0.04 per unit of risk. If you would invest  6,296,341  in Bitcoin on October 18, 2024 and sell it today you would earn a total of  3,758,859  from holding Bitcoin or generate 59.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy96.47%
ValuesDaily Returns

Bitcoin  vs.  BAG Films and

 Performance 
       Timeline  
Bitcoin 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.
BAG Films 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BAG Films and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Bitcoin and BAG Films Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bitcoin and BAG Films

The main advantage of trading using opposite Bitcoin and BAG Films positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, BAG Films 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 BAG Films will offset losses from the drop in BAG Films' long position.
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The idea behind Bitcoin and BAG Films and 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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