Correlation Between Pinetree Capital and XTRA Bitcoin
Can any of the company-specific risk be diversified away by investing in both Pinetree Capital and XTRA 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 Pinetree Capital and XTRA Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinetree Capital and XTRA Bitcoin, you can compare the effects of market volatilities on Pinetree Capital and XTRA 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 Pinetree Capital with a short position of XTRA Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinetree Capital and XTRA Bitcoin.
Diversification Opportunities for Pinetree Capital and XTRA Bitcoin
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pinetree and XTRA is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Pinetree Capital and XTRA Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTRA Bitcoin and Pinetree Capital 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 Pinetree Capital are associated (or correlated) with XTRA Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTRA Bitcoin has no effect on the direction of Pinetree Capital i.e., Pinetree Capital and XTRA Bitcoin go up and down completely randomly.
Pair Corralation between Pinetree Capital and XTRA Bitcoin
Assuming the 90 days horizon Pinetree Capital is expected to generate 2.66 times less return on investment than XTRA Bitcoin. But when comparing it to its historical volatility, Pinetree Capital is 4.28 times less risky than XTRA Bitcoin. It trades about 0.2 of its potential returns per unit of risk. XTRA Bitcoin is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.13 in XTRA Bitcoin on August 29, 2024 and sell it today you would earn a total of 0.03 from holding XTRA Bitcoin or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinetree Capital vs. XTRA Bitcoin
Performance |
| Timeline |
| Pinetree Capital |
| XTRA Bitcoin |
Pinetree Capital and XTRA Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinetree Capital and XTRA Bitcoin
The main advantage of trading using opposite Pinetree Capital and XTRA Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinetree Capital position performs unexpectedly, XTRA 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 XTRA Bitcoin will offset losses from the drop in XTRA Bitcoin's long position.| Pinetree Capital vs. Invesco High Income | Pinetree Capital vs. Blackrock Muniholdings Ny | Pinetree Capital vs. Nuveen California Select | Pinetree Capital vs. MFS Investment Grade |
| XTRA Bitcoin vs. Apple Inc | XTRA Bitcoin vs. Microsoft | XTRA Bitcoin vs. Alphabet Inc Class C | XTRA Bitcoin vs. Meta Platforms |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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