Correlation Between Bitcoin and Patria Investments
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Patria Investments 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 Patria Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Patria Investments Limited, you can compare the effects of market volatilities on Bitcoin and Patria Investments 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 Patria Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Patria Investments.
Diversification Opportunities for Bitcoin and Patria Investments
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bitcoin and Patria is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Patria Investments Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patria Investments 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 Patria Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patria Investments has no effect on the direction of Bitcoin i.e., Bitcoin and Patria Investments go up and down completely randomly.
Pair Corralation between Bitcoin and Patria Investments
Assuming the 90 days trading horizon Bitcoin is expected to generate 2.04 times more return on investment than Patria Investments. However, Bitcoin is 2.04 times more volatile than Patria Investments Limited. It trades about 0.2 of its potential returns per unit of risk. Patria Investments Limited is currently generating about 0.07 per unit of risk. If you would invest 7,233,196 in Bitcoin on October 29, 2024 and sell it today you would earn a total of 3,240,104 from holding Bitcoin or generate 44.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.19% |
| Values | Daily Returns |
Bitcoin vs. Patria Investments Limited
Performance |
| Timeline |
| Bitcoin |
| Patria Investments |
Bitcoin and Patria Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Patria Investments
The main advantage of trading using opposite Bitcoin and Patria Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Patria Investments 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 Patria Investments will offset losses from the drop in Patria Investments' long position.The idea behind Bitcoin and Patria Investments Limited 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.| Patria Investments vs. Iron Mountain Incorporated | Patria Investments vs. Palantir Technologies | Patria Investments vs. GX AI TECH | Patria Investments vs. Cognizant Technology Solutions |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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