Correlation Between Bitcoin and Nextensa
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Nextensa 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 Nextensa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Nextensa NV, you can compare the effects of market volatilities on Bitcoin and Nextensa 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 Nextensa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Nextensa.
Diversification Opportunities for Bitcoin and Nextensa
Very good diversification
The 3 months correlation between Bitcoin and Nextensa is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Nextensa NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextensa NV 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 Nextensa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextensa NV has no effect on the direction of Bitcoin i.e., Bitcoin and Nextensa go up and down completely randomly.
Pair Corralation between Bitcoin and Nextensa
Assuming the 90 days trading horizon Bitcoin is expected to generate 1.22 times more return on investment than Nextensa. However, Bitcoin is 1.22 times more volatile than Nextensa NV. It trades about 0.17 of its potential returns per unit of risk. Nextensa NV is currently generating about -0.2 per unit of risk. If you would invest 9,813,580 in Bitcoin on November 2, 2024 and sell it today you would earn a total of 671,920 from holding Bitcoin or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bitcoin vs. Nextensa NV
Performance |
| Timeline |
| Bitcoin |
| Nextensa NV |
Bitcoin and Nextensa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Nextensa
The main advantage of trading using opposite Bitcoin and Nextensa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Nextensa 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 Nextensa will offset losses from the drop in Nextensa's long position.The idea behind Bitcoin and Nextensa NV 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.| Nextensa vs. Retail Estates | Nextensa vs. EVS Broadcast Equipment | Nextensa vs. Onward Medical NV | Nextensa vs. Shurgard Self Storage |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |