Correlation Between CF Acquisition and BTCS
Can any of the company-specific risk be diversified away by investing in both CF Acquisition and BTCS 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 CF Acquisition and BTCS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Acquisition VII and BTCS Inc, you can compare the effects of market volatilities on CF Acquisition and BTCS 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 CF Acquisition with a short position of BTCS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Acquisition and BTCS.
Diversification Opportunities for CF Acquisition and BTCS
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CFFS and BTCS is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CF Acquisition VII and BTCS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTCS Inc and CF Acquisition 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 CF Acquisition VII are associated (or correlated) with BTCS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTCS Inc has no effect on the direction of CF Acquisition i.e., CF Acquisition and BTCS go up and down completely randomly.
Pair Corralation between CF Acquisition and BTCS
Given the investment horizon of 90 days CF Acquisition is expected to generate 29.88 times less return on investment than BTCS. But when comparing it to its historical volatility, CF Acquisition VII is 30.95 times less risky than BTCS. It trades about 0.08 of its potential returns per unit of risk. BTCS Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 113.00 in BTCS Inc on September 2, 2024 and sell it today you would earn a total of 243.00 from holding BTCS Inc or generate 215.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CF Acquisition VII vs. BTCS Inc
Performance |
| Timeline |
| CF Acquisition VII |
| BTCS Inc |
CF Acquisition and BTCS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Acquisition and BTCS
The main advantage of trading using opposite CF Acquisition and BTCS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Acquisition position performs unexpectedly, BTCS 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 BTCS will offset losses from the drop in BTCS's long position.The idea behind CF Acquisition VII and BTCS Inc 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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