Correlation Between SATO Technologies and Bitcoin Well
Can any of the company-specific risk be diversified away by investing in both SATO Technologies and Bitcoin Well 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 SATO Technologies and Bitcoin Well into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SATO Technologies Corp and Bitcoin Well, you can compare the effects of market volatilities on SATO Technologies and Bitcoin Well 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 SATO Technologies with a short position of Bitcoin Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of SATO Technologies and Bitcoin Well.
Diversification Opportunities for SATO Technologies and Bitcoin Well
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SATO and Bitcoin is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding SATO Technologies Corp and Bitcoin Well in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Well and SATO Technologies 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 SATO Technologies Corp are associated (or correlated) with Bitcoin Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Well has no effect on the direction of SATO Technologies i.e., SATO Technologies and Bitcoin Well go up and down completely randomly.
Pair Corralation between SATO Technologies and Bitcoin Well
Assuming the 90 days trading horizon SATO Technologies Corp is expected to generate 0.62 times more return on investment than Bitcoin Well. However, SATO Technologies Corp is 1.62 times less risky than Bitcoin Well. It trades about -0.13 of its potential returns per unit of risk. Bitcoin Well is currently generating about -0.33 per unit of risk. If you would invest 20.00 in SATO Technologies Corp on November 29, 2024 and sell it today you would lose (2.00) from holding SATO Technologies Corp or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SATO Technologies Corp vs. Bitcoin Well
Performance |
| Timeline |
| SATO Technologies Corp |
| Bitcoin Well |
SATO Technologies and Bitcoin Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SATO Technologies and Bitcoin Well
The main advantage of trading using opposite SATO Technologies and Bitcoin Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SATO Technologies position performs unexpectedly, Bitcoin Well 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 Bitcoin Well will offset losses from the drop in Bitcoin Well's long position.| SATO Technologies vs. Andean Precious Metals | SATO Technologies vs. Metalero Mining Corp | SATO Technologies vs. Ramp Metals | SATO Technologies vs. Magna Mining |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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