Correlation Between Bit Origin and Imperial Brands
Can any of the company-specific risk be diversified away by investing in both Bit Origin and Imperial Brands 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 Bit Origin and Imperial Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bit Origin and Imperial Brands PLC, you can compare the effects of market volatilities on Bit Origin and Imperial Brands 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 Bit Origin with a short position of Imperial Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bit Origin and Imperial Brands.
Diversification Opportunities for Bit Origin and Imperial Brands
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bit and Imperial is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bit Origin and Imperial Brands PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Brands PLC and Bit Origin 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 Bit Origin are associated (or correlated) with Imperial Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Brands PLC has no effect on the direction of Bit Origin i.e., Bit Origin and Imperial Brands go up and down completely randomly.
Pair Corralation between Bit Origin and Imperial Brands
Given the investment horizon of 90 days Bit Origin is expected to under-perform the Imperial Brands. In addition to that, Bit Origin is 5.4 times more volatile than Imperial Brands PLC. It trades about -0.16 of its total potential returns per unit of risk. Imperial Brands PLC is currently generating about 0.2 per unit of volatility. If you would invest 3,007 in Imperial Brands PLC on August 27, 2024 and sell it today you would earn a total of 169.00 from holding Imperial Brands PLC or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bit Origin vs. Imperial Brands PLC
Performance |
| Timeline |
| Bit Origin |
| Imperial Brands PLC |
Bit Origin and Imperial Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bit Origin and Imperial Brands
The main advantage of trading using opposite Bit Origin and Imperial Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bit Origin position performs unexpectedly, Imperial Brands 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 Imperial Brands will offset losses from the drop in Imperial Brands' long position.| Bit Origin vs. Better Choice | Bit Origin vs. Farmmi Inc | Bit Origin vs. Laird Superfood | Bit Origin vs. Planet Green Holdings |
| Imperial Brands vs. Japan Tobacco | Imperial Brands vs. British American Tobacco | Imperial Brands vs. Turning Point Brands | Imperial Brands vs. Universal |
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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