Correlation Between BTS and Worldwide Asset
Can any of the company-specific risk be diversified away by investing in both BTS and Worldwide Asset 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 BTS and Worldwide Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTS and Worldwide Asset eXchange, you can compare the effects of market volatilities on BTS and Worldwide Asset 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 BTS with a short position of Worldwide Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTS and Worldwide Asset.
Diversification Opportunities for BTS and Worldwide Asset
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BTS and Worldwide is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BTS and Worldwide Asset eXchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldwide Asset eXchange and BTS 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 BTS are associated (or correlated) with Worldwide Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldwide Asset eXchange has no effect on the direction of BTS i.e., BTS and Worldwide Asset go up and down completely randomly.
Pair Corralation between BTS and Worldwide Asset
Assuming the 90 days trading horizon BTS is expected to generate 1.22 times less return on investment than Worldwide Asset. But when comparing it to its historical volatility, BTS is 1.53 times less risky than Worldwide Asset. It trades about 0.37 of its potential returns per unit of risk. Worldwide Asset eXchange is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 3.29 in Worldwide Asset eXchange on August 27, 2024 and sell it today you would earn a total of 1.34 from holding Worldwide Asset eXchange or generate 40.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTS vs. Worldwide Asset eXchange
Performance |
| Timeline |
| BTS |
| Worldwide Asset eXchange |
BTS and Worldwide Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTS and Worldwide Asset
The main advantage of trading using opposite BTS and Worldwide Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTS position performs unexpectedly, Worldwide Asset 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 Worldwide Asset will offset losses from the drop in Worldwide Asset's long position.The idea behind BTS and Worldwide Asset eXchange 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.| Worldwide Asset vs. Sui | Worldwide Asset vs. Staked Ether | Worldwide Asset vs. Toncoin | Worldwide Asset vs. Worldcoin |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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