Correlation Between Visa and BIT Mining
Can any of the company-specific risk be diversified away by investing in both Visa and BIT Mining 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 Visa and BIT Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and BIT Mining, you can compare the effects of market volatilities on Visa and BIT Mining 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 Visa with a short position of BIT Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and BIT Mining.
Diversification Opportunities for Visa and BIT Mining
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Visa and BIT is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and BIT Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Mining and Visa 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 Visa Class A are associated (or correlated) with BIT Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Mining has no effect on the direction of Visa i.e., Visa and BIT Mining go up and down completely randomly.
Pair Corralation between Visa and BIT Mining
Taking into account the 90-day investment horizon Visa is expected to generate 1.15 times less return on investment than BIT Mining. But when comparing it to its historical volatility, Visa Class A is 4.82 times less risky than BIT Mining. It trades about 0.14 of its potential returns per unit of risk. BIT Mining is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 289.00 in BIT Mining on October 25, 2024 and sell it today you would earn a total of 3.00 from holding BIT Mining or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. BIT Mining
Performance |
| Timeline |
| Visa Class A |
| BIT Mining |
Visa and BIT Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and BIT Mining
The main advantage of trading using opposite Visa and BIT Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, BIT Mining 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 BIT Mining will offset losses from the drop in BIT Mining's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| BIT Mining vs. VNET Group DRC | BIT Mining vs. GDS Holdings | BIT Mining vs. CLARIVATE PLC | BIT Mining vs. CACI International |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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