Correlation Between Futu Holdings and BitFuFu
Can any of the company-specific risk be diversified away by investing in both Futu Holdings and BitFuFu 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 BitFuFu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Futu Holdings and BitFuFu Class A, you can compare the effects of market volatilities on Futu Holdings and BitFuFu 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 BitFuFu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Futu Holdings and BitFuFu.
Diversification Opportunities for Futu Holdings and BitFuFu
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Futu and BitFuFu is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Futu Holdings and BitFuFu Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFuFu Class A 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 BitFuFu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFuFu Class A has no effect on the direction of Futu Holdings i.e., Futu Holdings and BitFuFu go up and down completely randomly.
Pair Corralation between Futu Holdings and BitFuFu
Given the investment horizon of 90 days Futu Holdings is expected to generate 0.44 times more return on investment than BitFuFu. However, Futu Holdings is 2.25 times less risky than BitFuFu. It trades about 0.05 of its potential returns per unit of risk. BitFuFu Class A is currently generating about 0.02 per unit of risk. If you would invest 5,050 in Futu Holdings on August 27, 2024 and sell it today you would earn a total of 3,372 from holding Futu Holdings or generate 66.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Futu Holdings vs. BitFuFu Class A
Performance |
| Timeline |
| Futu Holdings |
| BitFuFu Class A |
Futu Holdings and BitFuFu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Futu Holdings and BitFuFu
The main advantage of trading using opposite Futu Holdings and BitFuFu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Futu Holdings position performs unexpectedly, BitFuFu 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 BitFuFu will offset losses from the drop in BitFuFu's long position.| Futu Holdings vs. Bit Digital | Futu Holdings vs. Xp Inc | Futu Holdings vs. Magic Empire Global | Futu Holdings vs. Applied Blockchain |
| BitFuFu vs. Dalata Hotel Group | BitFuFu vs. Insteel Industries | BitFuFu vs. Wingstop | BitFuFu vs. Summit Environmental |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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