Correlation Between Globalfoundries and BTC Digital
Can any of the company-specific risk be diversified away by investing in both Globalfoundries and BTC 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 Globalfoundries and BTC Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globalfoundries and BTC Digital, you can compare the effects of market volatilities on Globalfoundries and BTC 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 Globalfoundries with a short position of BTC Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globalfoundries and BTC Digital.
Diversification Opportunities for Globalfoundries and BTC Digital
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globalfoundries and BTC is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Globalfoundries and BTC Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTC Digital and Globalfoundries 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 Globalfoundries are associated (or correlated) with BTC Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTC Digital has no effect on the direction of Globalfoundries i.e., Globalfoundries and BTC Digital go up and down completely randomly.
Pair Corralation between Globalfoundries and BTC Digital
Considering the 90-day investment horizon Globalfoundries is expected to generate 34.59 times less return on investment than BTC Digital. But when comparing it to its historical volatility, Globalfoundries is 20.7 times less risky than BTC Digital. It trades about 0.09 of its potential returns per unit of risk. BTC Digital is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3.40 in BTC Digital on September 12, 2024 and sell it today you would earn a total of 1.00 from holding BTC Digital or generate 29.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Globalfoundries vs. BTC Digital
Performance |
| Timeline |
| Globalfoundries |
| BTC Digital |
Globalfoundries and BTC Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globalfoundries and BTC Digital
The main advantage of trading using opposite Globalfoundries and BTC Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globalfoundries position performs unexpectedly, BTC 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 BTC Digital will offset losses from the drop in BTC Digital's long position.| Globalfoundries vs. NVIDIA | Globalfoundries vs. Taiwan Semiconductor Manufacturing | Globalfoundries vs. Micron Technology | Globalfoundries vs. Qualcomm Incorporated |
| BTC Digital vs. Fernhill Beverage | BTC Digital vs. Thai Beverage PCL | BTC Digital vs. Fevertree Drinks Plc | BTC Digital vs. Acm Research |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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