Correlation Between Bank Central and BTC Digital
Can any of the company-specific risk be diversified away by investing in both Bank Central 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 Bank Central and BTC Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and BTC Digital, you can compare the effects of market volatilities on Bank Central 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 Bank Central with a short position of BTC Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and BTC Digital.
Diversification Opportunities for Bank Central and BTC Digital
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and BTC is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and BTC Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTC Digital and Bank Central 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 Bank Central Asia 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 Bank Central i.e., Bank Central and BTC Digital go up and down completely randomly.
Pair Corralation between Bank Central and BTC Digital
Assuming the 90 days horizon Bank Central is expected to generate 28.49 times less return on investment than BTC Digital. But when comparing it to its historical volatility, Bank Central Asia is 14.43 times less risky than BTC Digital. It trades about 0.04 of its potential returns per unit of risk. BTC Digital is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 301.00 in BTC Digital on August 24, 2024 and sell it today you would earn a total of 1,484 from holding BTC Digital or generate 493.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Bank Central Asia vs. BTC Digital
Performance |
| Timeline |
| Bank Central Asia |
| BTC Digital |
Bank Central and BTC Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and BTC Digital
The main advantage of trading using opposite Bank Central and BTC Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central 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.| Bank Central vs. Nedbank Group | Bank Central vs. Standard Bank Group | Bank Central vs. Kasikornbank Public Co | Bank Central vs. KBC Groep NV |
| BTC Digital vs. Lifevantage | BTC Digital vs. Balchem | BTC Digital vs. Western Acquisition Ventures | BTC Digital vs. CF Industries Holdings |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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