Correlation Between BTT and Lisk
Can any of the company-specific risk be diversified away by investing in both BTT and Lisk 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 BTT and Lisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTT and Lisk, you can compare the effects of market volatilities on BTT and Lisk 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 BTT with a short position of Lisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTT and Lisk.
Diversification Opportunities for BTT and Lisk
Pay attention - limited upside
The 3 months correlation between BTT and Lisk is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BTT and Lisk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lisk and BTT 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 BTT are associated (or correlated) with Lisk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lisk has no effect on the direction of BTT i.e., BTT and Lisk go up and down completely randomly.
Pair Corralation between BTT and Lisk
If you would invest 81.00 in Lisk on August 27, 2024 and sell it today you would earn a total of 28.00 from holding Lisk or generate 34.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTT vs. Lisk
Performance |
| Timeline |
| BTT |
| Lisk |
BTT and Lisk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTT and Lisk
The main advantage of trading using opposite BTT and Lisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTT position performs unexpectedly, Lisk 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 Lisk will offset losses from the drop in Lisk's long position.The idea behind BTT and Lisk 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.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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