Correlation Between Futu Holdings and Bitcoin Depot
Can any of the company-specific risk be diversified away by investing in both Futu Holdings and Bitcoin Depot 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 Bitcoin Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Futu Holdings and Bitcoin Depot, you can compare the effects of market volatilities on Futu Holdings and Bitcoin Depot 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 Bitcoin Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Futu Holdings and Bitcoin Depot.
Diversification Opportunities for Futu Holdings and Bitcoin Depot
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Futu and Bitcoin is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Futu Holdings and Bitcoin Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Depot 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 Bitcoin Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Depot has no effect on the direction of Futu Holdings i.e., Futu Holdings and Bitcoin Depot go up and down completely randomly.
Pair Corralation between Futu Holdings and Bitcoin Depot
Given the investment horizon of 90 days Futu Holdings is expected to under-perform the Bitcoin Depot. But the stock apears to be less risky and, when comparing its historical volatility, Futu Holdings is 2.49 times less risky than Bitcoin Depot. The stock trades about -0.1 of its potential returns per unit of risk. The Bitcoin Depot is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 144.00 in Bitcoin Depot on August 27, 2024 and sell it today you would earn a total of 55.00 from holding Bitcoin Depot or generate 38.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Futu Holdings vs. Bitcoin Depot
Performance |
| Timeline |
| Futu Holdings |
| Bitcoin Depot |
Futu Holdings and Bitcoin Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Futu Holdings and Bitcoin Depot
The main advantage of trading using opposite Futu Holdings and Bitcoin Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Futu Holdings position performs unexpectedly, Bitcoin Depot 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 Depot will offset losses from the drop in Bitcoin Depot's long position.| Futu Holdings vs. Bit Digital | Futu Holdings vs. Xp Inc | Futu Holdings vs. Magic Empire Global | Futu Holdings vs. Applied Blockchain |
| Bitcoin Depot vs. European Wax Center | Bitcoin Depot vs. Evolution Mining | Bitcoin Depot vs. NioCorp Developments Ltd | Bitcoin Depot vs. Estee Lauder Companies |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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