Correlation Between Wrapped Bitcoin and Axie Infinity
Can any of the company-specific risk be diversified away by investing in both Wrapped Bitcoin and Axie Infinity 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 Axie Infinity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wrapped Bitcoin and Axie Infinity Shards, you can compare the effects of market volatilities on Wrapped Bitcoin and Axie Infinity 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 Axie Infinity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wrapped Bitcoin and Axie Infinity.
Diversification Opportunities for Wrapped Bitcoin and Axie Infinity
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wrapped and Axie is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wrapped Bitcoin and Axie Infinity Shards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axie Infinity Shards 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 Axie Infinity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axie Infinity Shards has no effect on the direction of Wrapped Bitcoin i.e., Wrapped Bitcoin and Axie Infinity go up and down completely randomly.
Pair Corralation between Wrapped Bitcoin and Axie Infinity
Assuming the 90 days trading horizon Wrapped Bitcoin is expected to generate 0.74 times more return on investment than Axie Infinity. However, Wrapped Bitcoin is 1.35 times less risky than Axie Infinity. It trades about 0.42 of its potential returns per unit of risk. Axie Infinity Shards is currently generating about 0.15 per unit of risk. If you would invest 6,805,450 in Wrapped Bitcoin on August 24, 2024 and sell it today you would earn a total of 3,044,135 from holding Wrapped Bitcoin or generate 44.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wrapped Bitcoin vs. Axie Infinity Shards
Performance |
| Timeline |
| Wrapped Bitcoin |
| Axie Infinity Shards |
Wrapped Bitcoin and Axie Infinity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wrapped Bitcoin and Axie Infinity
The main advantage of trading using opposite Wrapped Bitcoin and Axie Infinity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wrapped Bitcoin position performs unexpectedly, Axie Infinity 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 Axie Infinity will offset losses from the drop in Axie Infinity's long position.| Wrapped Bitcoin vs. Solana | Wrapped Bitcoin vs. XRP | Wrapped Bitcoin vs. Sui | Wrapped Bitcoin vs. Staked Ether |
| Axie Infinity vs. Staked Ether | Axie Infinity vs. EigenLayer | Axie Infinity vs. EOSDAC | Axie Infinity vs. BLZ |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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