Correlation Between Bitcoin and Voya International
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Voya International 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 Voya International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Voya International Index, you can compare the effects of market volatilities on Bitcoin and Voya International 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 Voya International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Voya International.
Diversification Opportunities for Bitcoin and Voya International
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bitcoin and Voya is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Voya International Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya International Index 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 Voya International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya International Index has no effect on the direction of Bitcoin i.e., Bitcoin and Voya International go up and down completely randomly.
Pair Corralation between Bitcoin and Voya International
Assuming the 90 days trading horizon Bitcoin is expected to generate 3.34 times more return on investment than Voya International. However, Bitcoin is 3.34 times more volatile than Voya International Index. It trades about 0.15 of its potential returns per unit of risk. Voya International Index is currently generating about 0.17 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 Against |
| Strength | Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Bitcoin vs. Voya International Index
Performance |
| Timeline |
| Bitcoin |
| Voya International Index |
Bitcoin and Voya International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Voya International
The main advantage of trading using opposite Bitcoin and Voya International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Voya International 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 Voya International will offset losses from the drop in Voya International's long position.The idea behind Bitcoin and Voya International Index 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.| Voya International vs. Voya Bond Index | Voya International vs. Voya Bond Index | Voya International vs. Voya Limited Maturity | Voya International vs. Voya Limited Maturity |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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