Correlation Between Wrapped Bitcoin and AURORA
Can any of the company-specific risk be diversified away by investing in both Wrapped Bitcoin and AURORA 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 Wrapped Bitcoin and AURORA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wrapped Bitcoin and AURORA, you can compare the effects of market volatilities on Wrapped Bitcoin and AURORA 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 Wrapped Bitcoin with a short position of AURORA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wrapped Bitcoin and AURORA.
Diversification Opportunities for Wrapped Bitcoin and AURORA
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wrapped and AURORA is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Wrapped Bitcoin and AURORA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AURORA and Wrapped Bitcoin 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 Wrapped Bitcoin are associated (or correlated) with AURORA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AURORA has no effect on the direction of Wrapped Bitcoin i.e., Wrapped Bitcoin and AURORA go up and down completely randomly.
Pair Corralation between Wrapped Bitcoin and AURORA
Assuming the 90 days trading horizon Wrapped Bitcoin is expected to generate 0.43 times more return on investment than AURORA. However, Wrapped Bitcoin is 2.3 times less risky than AURORA. It trades about -0.31 of its potential returns per unit of risk. AURORA is currently generating about -0.28 per unit of risk. If you would invest 10,110,200 in Wrapped Bitcoin on November 28, 2024 and sell it today you would lose (1,639,227) from holding Wrapped Bitcoin or give up 16.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Wrapped Bitcoin vs. AURORA
Performance |
| Timeline |
| Wrapped Bitcoin |
| AURORA |
Wrapped Bitcoin and AURORA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wrapped Bitcoin and AURORA
The main advantage of trading using opposite Wrapped Bitcoin and AURORA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wrapped Bitcoin position performs unexpectedly, AURORA 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 AURORA will offset losses from the drop in AURORA's long position.| Wrapped Bitcoin vs. Staked Ether | Wrapped Bitcoin vs. Cronos | Wrapped Bitcoin vs. Monero | Wrapped Bitcoin vs. Tether |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |