Correlation Between Conflux Network and Bitcoin
Can any of the company-specific risk be diversified away by investing in both Conflux Network and Bitcoin 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 Conflux Network and Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conflux Network and Bitcoin, you can compare the effects of market volatilities on Conflux Network and Bitcoin 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 Conflux Network with a short position of Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conflux Network and Bitcoin.
Diversification Opportunities for Conflux Network and Bitcoin
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Conflux and Bitcoin is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Conflux Network and Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin and Conflux Network 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 Conflux Network are associated (or correlated) with Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin has no effect on the direction of Conflux Network i.e., Conflux Network and Bitcoin go up and down completely randomly.
Pair Corralation between Conflux Network and Bitcoin
Assuming the 90 days trading horizon Conflux Network is expected to generate 1.64 times more return on investment than Bitcoin. However, Conflux Network is 1.64 times more volatile than Bitcoin. It trades about 0.09 of its potential returns per unit of risk. Bitcoin is currently generating about 0.1 per unit of risk. If you would invest 2.84 in Conflux Network on August 23, 2024 and sell it today you would earn a total of 13.16 from holding Conflux Network or generate 463.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Conflux Network vs. Bitcoin
Performance |
| Timeline |
| Conflux Network |
| Bitcoin |
Conflux Network and Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conflux Network and Bitcoin
The main advantage of trading using opposite Conflux Network and Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conflux Network position performs unexpectedly, Bitcoin 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 Bitcoin will offset losses from the drop in Bitcoin's long position.| Conflux Network vs. Staked Ether | Conflux Network vs. EigenLayer | Conflux Network vs. EOSDAC | Conflux Network vs. BLZ |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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