Correlation Between Whole Earth and Bit Origin
Can any of the company-specific risk be diversified away by investing in both Whole Earth and Bit Origin 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 Whole Earth and Bit Origin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whole Earth Brands and Bit Origin, you can compare the effects of market volatilities on Whole Earth and Bit Origin 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 Whole Earth with a short position of Bit Origin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whole Earth and Bit Origin.
Diversification Opportunities for Whole Earth and Bit Origin
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Whole and Bit is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Whole Earth Brands and Bit Origin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bit Origin and Whole Earth 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 Whole Earth Brands are associated (or correlated) with Bit Origin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bit Origin has no effect on the direction of Whole Earth i.e., Whole Earth and Bit Origin go up and down completely randomly.
Pair Corralation between Whole Earth and Bit Origin
Given the investment horizon of 90 days Whole Earth Brands is expected to under-perform the Bit Origin. But the stock apears to be less risky and, when comparing its historical volatility, Whole Earth Brands is 1.5 times less risky than Bit Origin. The stock trades about -0.02 of its potential returns per unit of risk. The Bit Origin is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 807.00 in Bit Origin on August 27, 2024 and sell it today you would lose (666.00) from holding Bit Origin or give up 82.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.48% |
| Values | Daily Returns |
Whole Earth Brands vs. Bit Origin
Performance |
| Timeline |
| Whole Earth Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bit Origin |
Whole Earth and Bit Origin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whole Earth and Bit Origin
The main advantage of trading using opposite Whole Earth and Bit Origin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whole Earth position performs unexpectedly, Bit Origin 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 Bit Origin will offset losses from the drop in Bit Origin's long position.| Whole Earth vs. Seneca Foods Corp | Whole Earth vs. Lifeway Foods | Whole Earth vs. John B Sanfilippo | Whole Earth vs. Real Good Food |
| Bit Origin vs. Better Choice | Bit Origin vs. Farmmi Inc | Bit Origin vs. Laird Superfood | Bit Origin vs. Planet Green Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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