Correlation Between Bitcoin and Valic Company
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Valic Company 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 Valic Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Valic Company I, you can compare the effects of market volatilities on Bitcoin and Valic Company 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 Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Valic Company.
Diversification Opportunities for Bitcoin and Valic Company
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bitcoin and Valic is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I 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 Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Bitcoin i.e., Bitcoin and Valic Company go up and down completely randomly.
Pair Corralation between Bitcoin and Valic Company
Assuming the 90 days trading horizon Bitcoin is expected to generate 4.73 times more return on investment than Valic Company. However, Bitcoin is 4.73 times more volatile than Valic Company I. It trades about 0.2 of its potential returns per unit of risk. Valic Company I is currently generating about 0.06 per unit of risk. If you would invest 5,797,552 in Bitcoin on November 2, 2024 and sell it today you would earn a total of 4,687,948 from holding Bitcoin or generate 80.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.2% |
| Values | Daily Returns |
Bitcoin vs. Valic Company I
Performance |
| Timeline |
| Bitcoin |
| Valic Company I |
Bitcoin and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Valic Company
The main advantage of trading using opposite Bitcoin and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company's long position.The idea behind Bitcoin and Valic Company I 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.| Valic Company vs. Mid Cap Index | Valic Company vs. Mid Cap Strategic | Valic Company vs. Valic Company I | Valic Company vs. Valic Company I |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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