Correlation Between NYSE Composite and Cathedra Bitcoin
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Cathedra Bitcoin 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 NYSE Composite and Cathedra Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Cathedra Bitcoin, you can compare the effects of market volatilities on NYSE Composite and Cathedra Bitcoin 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 NYSE Composite with a short position of Cathedra Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Cathedra Bitcoin.
Diversification Opportunities for NYSE Composite and Cathedra Bitcoin
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Cathedra is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Cathedra Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathedra Bitcoin and NYSE Composite 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 NYSE Composite are associated (or correlated) with Cathedra Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathedra Bitcoin has no effect on the direction of NYSE Composite i.e., NYSE Composite and Cathedra Bitcoin go up and down completely randomly.
Pair Corralation between NYSE Composite and Cathedra Bitcoin
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.23 times less return on investment than Cathedra Bitcoin. But when comparing it to its historical volatility, NYSE Composite is 10.93 times less risky than Cathedra Bitcoin. It trades about 0.11 of its potential returns per unit of risk. Cathedra Bitcoin is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 7.53 in Cathedra Bitcoin on August 31, 2024 and sell it today you would lose (2.14) from holding Cathedra Bitcoin or give up 28.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
NYSE Composite vs. Cathedra Bitcoin
Performance |
| Timeline |
NYSE Composite and Cathedra Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Cathedra Bitcoin
Pair trading matchups for Cathedra Bitcoin
Pair Trading with NYSE Composite and Cathedra Bitcoin
The main advantage of trading using opposite NYSE Composite and Cathedra Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Cathedra Bitcoin 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 Cathedra Bitcoin will offset losses from the drop in Cathedra Bitcoin's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Cathedra Bitcoin vs. Arcane Crypto AB | Cathedra Bitcoin vs. Cypherpunk Holdings | Cathedra Bitcoin vs. CreditRiskMonitorCom | Cathedra Bitcoin vs. SPENN Technology AS |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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