Correlation Between Riot Blockchain and Futu Holdings
Can any of the company-specific risk be diversified away by investing in both Riot Blockchain and Futu Holdings 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 Riot Blockchain and Futu Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Riot Blockchain and Futu Holdings, you can compare the effects of market volatilities on Riot Blockchain and Futu Holdings 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 Riot Blockchain with a short position of Futu Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Riot Blockchain and Futu Holdings.
Diversification Opportunities for Riot Blockchain and Futu Holdings
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Riot and Futu is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Riot Blockchain and Futu Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futu Holdings and Riot Blockchain 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 Riot Blockchain are associated (or correlated) with Futu Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futu Holdings has no effect on the direction of Riot Blockchain i.e., Riot Blockchain and Futu Holdings go up and down completely randomly.
Pair Corralation between Riot Blockchain and Futu Holdings
Given the investment horizon of 90 days Riot Blockchain is expected to generate 1.58 times more return on investment than Futu Holdings. However, Riot Blockchain is 1.58 times more volatile than Futu Holdings. It trades about 0.21 of its potential returns per unit of risk. Futu Holdings is currently generating about -0.09 per unit of risk. If you would invest 898.00 in Riot Blockchain on September 4, 2024 and sell it today you would earn a total of 312.00 from holding Riot Blockchain or generate 34.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Riot Blockchain vs. Futu Holdings
Performance |
| Timeline |
| Riot Blockchain |
| Futu Holdings |
Riot Blockchain and Futu Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Riot Blockchain and Futu Holdings
The main advantage of trading using opposite Riot Blockchain and Futu Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Riot Blockchain position performs unexpectedly, Futu Holdings 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 Futu Holdings will offset losses from the drop in Futu Holdings' long position.| Riot Blockchain vs. Hut 8 Corp | Riot Blockchain vs. CleanSpark | Riot Blockchain vs. Bit Digital | Riot Blockchain vs. Bitfarms |
| Futu Holdings vs. Bit Digital | Futu Holdings vs. Xp Inc | Futu Holdings vs. Magic Empire Global | Futu Holdings vs. Applied Blockchain |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |