Correlation Between Futu Holdings and Bit Digital
Can any of the company-specific risk be diversified away by investing in both Futu Holdings and Bit Digital 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 Futu Holdings and Bit Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Futu Holdings and Bit Digital, you can compare the effects of market volatilities on Futu Holdings and Bit Digital 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 Futu Holdings with a short position of Bit Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Futu Holdings and Bit Digital.
Diversification Opportunities for Futu Holdings and Bit Digital
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Futu and Bit is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Futu Holdings and Bit Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bit Digital and Futu Holdings 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 Futu Holdings are associated (or correlated) with Bit Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bit Digital has no effect on the direction of Futu Holdings i.e., Futu Holdings and Bit Digital go up and down completely randomly.
Pair Corralation between Futu Holdings and Bit Digital
Given the investment horizon of 90 days Futu Holdings is expected to under-perform the Bit Digital. But the stock apears to be less risky and, when comparing its historical volatility, Futu Holdings is 1.63 times less risky than Bit Digital. The stock trades about -0.01 of its potential returns per unit of risk. The Bit Digital is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 387.00 in Bit Digital on August 24, 2024 and sell it today you would earn a total of 12.00 from holding Bit Digital or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Futu Holdings vs. Bit Digital
Performance |
| Timeline |
| Futu Holdings |
| Bit Digital |
Futu Holdings and Bit Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Futu Holdings and Bit Digital
The main advantage of trading using opposite Futu Holdings and Bit Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Futu Holdings position performs unexpectedly, Bit Digital 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 Digital will offset losses from the drop in Bit Digital's long position.| Futu Holdings vs. Bit Digital | Futu Holdings vs. Xp Inc | Futu Holdings vs. Magic Empire Global | Futu Holdings vs. Applied Blockchain |
| Bit Digital vs. Hut 8 Corp | Bit Digital vs. HIVE Blockchain Technologies | Bit Digital vs. CleanSpark | Bit Digital vs. Terawulf |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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