Correlation Between BTC Digital and Wingstop
Can any of the company-specific risk be diversified away by investing in both BTC Digital and Wingstop 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 Wingstop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTC Digital and Wingstop, you can compare the effects of market volatilities on BTC Digital and Wingstop 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 Wingstop. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTC Digital and Wingstop.
Diversification Opportunities for BTC Digital and Wingstop
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BTC and Wingstop is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding BTC Digital and Wingstop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wingstop 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 Wingstop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wingstop has no effect on the direction of BTC Digital i.e., BTC Digital and Wingstop go up and down completely randomly.
Pair Corralation between BTC Digital and Wingstop
Assuming the 90 days horizon BTC Digital is expected to generate 12.13 times more return on investment than Wingstop. However, BTC Digital is 12.13 times more volatile than Wingstop. It trades about 0.11 of its potential returns per unit of risk. Wingstop is currently generating about 0.08 per unit of risk. If you would invest 4.80 in BTC Digital on August 27, 2024 and sell it today you would earn a total of 2.37 from holding BTC Digital or generate 49.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.46% |
| Values | Daily Returns |
BTC Digital vs. Wingstop
Performance |
| Timeline |
| BTC Digital |
| Wingstop |
BTC Digital and Wingstop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTC Digital and Wingstop
The main advantage of trading using opposite BTC Digital and Wingstop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTC Digital position performs unexpectedly, Wingstop 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 Wingstop will offset losses from the drop in Wingstop's long position.| BTC Digital vs. Bright Horizons Family | BTC Digital vs. Smart Share Global | BTC Digital vs. Mister Car Wash | BTC Digital vs. Rollins |
| Wingstop vs. Papa Johns International | Wingstop vs. Chipotle Mexican Grill | Wingstop vs. The Wendys Co | Wingstop vs. Dominos Pizza |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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