Correlation Between BTC Digital and Old Dominion
Can any of the company-specific risk be diversified away by investing in both BTC Digital and Old Dominion 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 BTC Digital and Old Dominion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTC Digital and Old Dominion Freight, you can compare the effects of market volatilities on BTC Digital and Old Dominion 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 BTC Digital with a short position of Old Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Digital and Old Dominion.
Diversification Opportunities for BTC Digital and Old Dominion
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BTC and Old is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BTC Digital and Old Dominion Freight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Dominion Freight and BTC Digital 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 BTC Digital are associated (or correlated) with Old Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Dominion Freight has no effect on the direction of BTC Digital i.e., BTC Digital and Old Dominion go up and down completely randomly.
Pair Corralation between BTC Digital and Old Dominion
Assuming the 90 days horizon BTC Digital is expected to generate 8.55 times more return on investment than Old Dominion. However, BTC Digital is 8.55 times more volatile than Old Dominion Freight. It trades about 0.1 of its potential returns per unit of risk. Old Dominion Freight is currently generating about 0.24 per unit of risk. If you would invest 4.99 in BTC Digital on November 9, 2024 and sell it today you would earn a total of 0.41 from holding BTC Digital or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTC Digital vs. Old Dominion Freight
Performance |
| Timeline |
| BTC Digital |
| Old Dominion Freight |
BTC Digital and Old Dominion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTC Digital and Old Dominion
The main advantage of trading using opposite BTC Digital and Old Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Digital position performs unexpectedly, Old Dominion 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 Old Dominion will offset losses from the drop in Old Dominion's long position.| BTC Digital vs. Acumen Pharmaceuticals | BTC Digital vs. Lindblad Expeditions Holdings | BTC Digital vs. Valneva SE ADR | BTC Digital vs. Academy Sports Outdoors |
| Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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