Correlation Between Bitcoin and Phala Network
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Phala Network 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 Phala Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Phala Network, you can compare the effects of market volatilities on Bitcoin and Phala Network 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 Phala Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Phala Network.
Diversification Opportunities for Bitcoin and Phala Network
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bitcoin and Phala is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Phala Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phala Network 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 Phala Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phala Network has no effect on the direction of Bitcoin i.e., Bitcoin and Phala Network go up and down completely randomly.
Pair Corralation between Bitcoin and Phala Network
Assuming the 90 days trading horizon Bitcoin is expected to generate 1.14 times less return on investment than Phala Network. But when comparing it to its historical volatility, Bitcoin is 1.37 times less risky than Phala Network. It trades about 0.08 of its potential returns per unit of risk. Phala Network is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Phala Network on October 11, 2024 and sell it today you would earn a total of 19.00 from holding Phala Network or generate 146.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin vs. Phala Network
Performance |
| Timeline |
| Bitcoin |
| Phala Network |
Bitcoin and Phala Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Phala Network
The main advantage of trading using opposite Bitcoin and Phala Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Phala Network 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 Phala Network will offset losses from the drop in Phala Network's long position.The idea behind Bitcoin and Phala Network 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.| Phala Network vs. Fwog | Phala Network vs. Staked Ether | Phala Network vs. EigenLayer | Phala Network vs. EOSDAC |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |