Correlation Between Bitcoin and Sienna Resources
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Sienna Resources 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 Sienna Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Sienna Resources, you can compare the effects of market volatilities on Bitcoin and Sienna Resources 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 Sienna Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Sienna Resources.
Diversification Opportunities for Bitcoin and Sienna Resources
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bitcoin and Sienna is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Sienna Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sienna Resources 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 Sienna Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sienna Resources has no effect on the direction of Bitcoin i.e., Bitcoin and Sienna Resources go up and down completely randomly.
Pair Corralation between Bitcoin and Sienna Resources
Assuming the 90 days trading horizon Bitcoin is expected to generate 0.22 times more return on investment than Sienna Resources. However, Bitcoin is 4.48 times less risky than Sienna Resources. It trades about 0.22 of its potential returns per unit of risk. Sienna Resources is currently generating about 0.05 per unit of risk. If you would invest 6,937,809 in Bitcoin on November 2, 2024 and sell it today you would earn a total of 3,547,691 from holding Bitcoin or generate 51.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.88% |
| Values | Daily Returns |
Bitcoin vs. Sienna Resources
Performance |
| Timeline |
| Bitcoin |
| Sienna Resources |
Bitcoin and Sienna Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Sienna Resources
The main advantage of trading using opposite Bitcoin and Sienna Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Sienna Resources 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 Sienna Resources will offset losses from the drop in Sienna Resources' long position.The idea behind Bitcoin and Sienna Resources 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.| Sienna Resources vs. Rocky Mountain Liquor | Sienna Resources vs. Air Canada | Sienna Resources vs. A W FOOD | Sienna Resources vs. Chemtrade Logistics Income |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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