Correlation Between Interactive Brokers and Bit Digital
Can any of the company-specific risk be diversified away by investing in both Interactive Brokers 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 Interactive Brokers and Bit Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interactive Brokers Group and Bit Digital, you can compare the effects of market volatilities on Interactive Brokers 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 Interactive Brokers with a short position of Bit Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interactive Brokers and Bit Digital.
Diversification Opportunities for Interactive Brokers and Bit Digital
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Interactive and Bit is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Interactive Brokers Group and Bit Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bit Digital and Interactive Brokers 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 Interactive Brokers Group 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 Interactive Brokers i.e., Interactive Brokers and Bit Digital go up and down completely randomly.
Pair Corralation between Interactive Brokers and Bit Digital
Given the investment horizon of 90 days Interactive Brokers Group is expected to generate 0.29 times more return on investment than Bit Digital. However, Interactive Brokers Group is 3.49 times less risky than Bit Digital. It trades about 0.43 of its potential returns per unit of risk. Bit Digital is currently generating about -0.03 per unit of risk. If you would invest 15,099 in Interactive Brokers Group on August 29, 2024 and sell it today you would earn a total of 4,196 from holding Interactive Brokers Group or generate 27.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interactive Brokers Group vs. Bit Digital
Performance |
| Timeline |
| Interactive Brokers |
| Bit Digital |
Interactive Brokers and Bit Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interactive Brokers and Bit Digital
The main advantage of trading using opposite Interactive Brokers and Bit Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interactive Brokers 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.| Interactive Brokers vs. Capital Clean Energy | Interactive Brokers vs. Sonida Senior Living | Interactive Brokers vs. HUTCHMED DRC | Interactive Brokers vs. Radcom |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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