Correlation Between Bitcoin and Puma Biotechnology
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Puma Biotechnology 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 Puma Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Puma Biotechnology, you can compare the effects of market volatilities on Bitcoin and Puma Biotechnology 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 Puma Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Puma Biotechnology.
Diversification Opportunities for Bitcoin and Puma Biotechnology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bitcoin and Puma is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Puma Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Biotechnology 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 Puma Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Biotechnology has no effect on the direction of Bitcoin i.e., Bitcoin and Puma Biotechnology go up and down completely randomly.
Pair Corralation between Bitcoin and Puma Biotechnology
Assuming the 90 days trading horizon Bitcoin is expected to generate 1.55 times less return on investment than Puma Biotechnology. But when comparing it to its historical volatility, Bitcoin is 2.84 times less risky than Puma Biotechnology. It trades about 0.15 of its potential returns per unit of risk. Puma Biotechnology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 278.00 in Puma Biotechnology on October 20, 2024 and sell it today you would earn a total of 19.00 from holding Puma Biotechnology or generate 6.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Bitcoin vs. Puma Biotechnology
Performance |
| Timeline |
| Bitcoin |
| Puma Biotechnology |
Bitcoin and Puma Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Puma Biotechnology
The main advantage of trading using opposite Bitcoin and Puma Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Puma Biotechnology 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 Puma Biotechnology will offset losses from the drop in Puma Biotechnology's long position.The idea behind Bitcoin and Puma Biotechnology 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.| Puma Biotechnology vs. Ultragenyx | Puma Biotechnology vs. Crinetics Pharmaceuticals | Puma Biotechnology vs. Arvinas | Puma Biotechnology vs. Revolution Medicines |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |