Correlation Between Formula Systems and BitFrontier Capital
Can any of the company-specific risk be diversified away by investing in both Formula Systems and BitFrontier Capital 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 Formula Systems and BitFrontier Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formula Systems 1985 and BitFrontier Capital Holdings, you can compare the effects of market volatilities on Formula Systems and BitFrontier Capital 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 Formula Systems with a short position of BitFrontier Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formula Systems and BitFrontier Capital.
Diversification Opportunities for Formula Systems and BitFrontier Capital
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Formula and BitFrontier is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Formula Systems 1985 and BitFrontier Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFrontier Capital and Formula Systems 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 Formula Systems 1985 are associated (or correlated) with BitFrontier Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFrontier Capital has no effect on the direction of Formula Systems i.e., Formula Systems and BitFrontier Capital go up and down completely randomly.
Pair Corralation between Formula Systems and BitFrontier Capital
Assuming the 90 days horizon Formula Systems is expected to generate 4.08 times less return on investment than BitFrontier Capital. But when comparing it to its historical volatility, Formula Systems 1985 is 6.04 times less risky than BitFrontier Capital. It trades about 0.05 of its potential returns per unit of risk. BitFrontier Capital Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 0.91 in BitFrontier Capital Holdings on August 25, 2024 and sell it today you would lose (0.64) from holding BitFrontier Capital Holdings or give up 70.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Formula Systems 1985 vs. BitFrontier Capital Holdings
Performance |
| Timeline |
| Formula Systems 1985 |
| BitFrontier Capital |
Formula Systems and BitFrontier Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formula Systems and BitFrontier Capital
The main advantage of trading using opposite Formula Systems and BitFrontier Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formula Systems position performs unexpectedly, BitFrontier Capital 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 BitFrontier Capital will offset losses from the drop in BitFrontier Capital's long position.| Formula Systems vs. Data Storage Corp | Formula Systems vs. Usio Inc | Formula Systems vs. ARB IOT Group | Formula Systems vs. FiscalNote Holdings |
| BitFrontier Capital vs. Morgan Stanley | BitFrontier Capital vs. Goldman Sachs Group | BitFrontier Capital vs. Charles Schwab Corp | BitFrontier Capital vs. Interactive Brokers Group |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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