Correlation Between Bitcoin and Globe Metals
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Globe Metals 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 Globe Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Globe Metals Mining, you can compare the effects of market volatilities on Bitcoin and Globe Metals 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 Globe Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Globe Metals.
Diversification Opportunities for Bitcoin and Globe Metals
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bitcoin and Globe is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Globe Metals Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Metals Mining 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 Globe Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Metals Mining has no effect on the direction of Bitcoin i.e., Bitcoin and Globe Metals go up and down completely randomly.
Pair Corralation between Bitcoin and Globe Metals
Assuming the 90 days trading horizon Bitcoin is expected to generate 0.43 times more return on investment than Globe Metals. However, Bitcoin is 2.33 times less risky than Globe Metals. It trades about 0.15 of its potential returns per unit of risk. Globe Metals Mining is currently generating about -0.03 per unit of risk. If you would invest 9,776,949 in Bitcoin on October 20, 2024 and sell it today you would earn a total of 658,751 from holding Bitcoin or generate 6.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Bitcoin vs. Globe Metals Mining
Performance |
| Timeline |
| Bitcoin |
| Globe Metals Mining |
Bitcoin and Globe Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Globe Metals
The main advantage of trading using opposite Bitcoin and Globe Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Globe Metals 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 Globe Metals will offset losses from the drop in Globe Metals' long position.The idea behind Bitcoin and Globe Metals Mining 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.| Globe Metals vs. Iron Road | Globe Metals vs. The Environmental Group | Globe Metals vs. Centaurus Metals | Globe Metals vs. Ironbark Capital |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |