Correlation Between Bitcoin and Fidelity California
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Fidelity California 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 Fidelity California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Fidelity California Municipal, you can compare the effects of market volatilities on Bitcoin and Fidelity California 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 Fidelity California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Fidelity California.
Diversification Opportunities for Bitcoin and Fidelity California
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bitcoin and Fidelity is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Fidelity California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity California 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 Fidelity California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity California has no effect on the direction of Bitcoin i.e., Bitcoin and Fidelity California go up and down completely randomly.
Pair Corralation between Bitcoin and Fidelity California
Assuming the 90 days trading horizon Bitcoin is expected to generate 34.82 times more return on investment than Fidelity California. However, Bitcoin is 34.82 times more volatile than Fidelity California Municipal. It trades about 0.08 of its potential returns per unit of risk. Fidelity California Municipal is currently generating about 0.04 per unit of risk. If you would invest 2,278,992 in Bitcoin on October 11, 2024 and sell it today you would earn a total of 6,981,707 from holding Bitcoin or generate 306.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 60.08% |
| Values | Daily Returns |
Bitcoin vs. Fidelity California Municipal
Performance |
| Timeline |
| Bitcoin |
| Fidelity California |
Bitcoin and Fidelity California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Fidelity California
The main advantage of trading using opposite Bitcoin and Fidelity California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Fidelity California 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 Fidelity California will offset losses from the drop in Fidelity California's long position.The idea behind Bitcoin and Fidelity California Municipal 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.| Fidelity California vs. T Rowe Price | Fidelity California vs. Alliancebernstein National Municipalome | Fidelity California vs. Virtus Seix Government | Fidelity California vs. Franklin Adjustable Government |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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