Correlation Between XTRA Bitcoin and Terawulf
Can any of the company-specific risk be diversified away by investing in both XTRA Bitcoin and Terawulf 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 XTRA Bitcoin and Terawulf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XTRA Bitcoin and Terawulf, you can compare the effects of market volatilities on XTRA Bitcoin and Terawulf 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 XTRA Bitcoin with a short position of Terawulf. Check out your portfolio center. Please also check ongoing floating volatility patterns of XTRA Bitcoin and Terawulf.
Diversification Opportunities for XTRA Bitcoin and Terawulf
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between XTRA and Terawulf is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding XTRA Bitcoin and Terawulf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terawulf and XTRA Bitcoin 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 XTRA Bitcoin are associated (or correlated) with Terawulf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terawulf has no effect on the direction of XTRA Bitcoin i.e., XTRA Bitcoin and Terawulf go up and down completely randomly.
Pair Corralation between XTRA Bitcoin and Terawulf
Given the investment horizon of 90 days XTRA Bitcoin is expected to generate 1.86 times more return on investment than Terawulf. However, XTRA Bitcoin is 1.86 times more volatile than Terawulf. It trades about 0.11 of its potential returns per unit of risk. Terawulf is currently generating about 0.13 per unit of risk. If you would invest 0.13 in XTRA Bitcoin on August 26, 2024 and sell it today you would earn a total of 0.02 from holding XTRA Bitcoin or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
XTRA Bitcoin vs. Terawulf
Performance |
| Timeline |
| XTRA Bitcoin |
| Terawulf |
XTRA Bitcoin and Terawulf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XTRA Bitcoin and Terawulf
The main advantage of trading using opposite XTRA Bitcoin and Terawulf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XTRA Bitcoin position performs unexpectedly, Terawulf 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 Terawulf will offset losses from the drop in Terawulf's long position.| XTRA Bitcoin vs. Copa Holdings SA | XTRA Bitcoin vs. United Airlines Holdings | XTRA Bitcoin vs. Delta Air Lines | XTRA Bitcoin vs. SkyWest |
| Terawulf vs. PowerUp Acquisition Corp | Terawulf vs. Aurora Innovation | Terawulf vs. HUMANA INC | Terawulf vs. Aquagold International |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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