Correlation Between Kusama and BounceBit

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Can any of the company-specific risk be diversified away by investing in both Kusama and BounceBit 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 Kusama and BounceBit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kusama and BounceBit, you can compare the effects of market volatilities on Kusama and BounceBit 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 Kusama with a short position of BounceBit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kusama and BounceBit.

Diversification Opportunities for Kusama and BounceBit

KusamaBounceBitDiversified AwayKusamaBounceBitDiversified Away100%
0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Kusama and BounceBit is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kusama and BounceBit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BounceBit and Kusama 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 Kusama are associated (or correlated) with BounceBit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BounceBit has no effect on the direction of Kusama i.e., Kusama and BounceBit go up and down completely randomly.

Pair Corralation between Kusama and BounceBit

Assuming the 90 days trading horizon Kusama is expected to generate 0.76 times more return on investment than BounceBit. However, Kusama is 1.32 times less risky than BounceBit. It trades about -0.22 of its potential returns per unit of risk. BounceBit is currently generating about -0.34 per unit of risk. If you would invest  2,747  in Kusama on November 23, 2024 and sell it today you would lose (754.00) from holding Kusama or give up 27.45% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.65%
ValuesDaily Returns

Kusama  vs.  BounceBit

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50050100150
JavaScript chart by amCharts 3.21.15KSM BB
       Timeline  
Kusama 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Kusama has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's primary indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for Kusama shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb20253035404550
BounceBit 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days BounceBit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for BounceBit shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.150.20.250.30.350.40.450.5

Kusama and BounceBit Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-52.76-39.52-26.27-13.020.2213.3726.9640.5554.15 0.0020.0030.0040.0050.006
JavaScript chart by amCharts 3.21.15KSM BB
       Returns  

Pair Trading with Kusama and BounceBit

The main advantage of trading using opposite Kusama and BounceBit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kusama position performs unexpectedly, BounceBit 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 BounceBit will offset losses from the drop in BounceBit's long position.
The idea behind Kusama and BounceBit pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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