Correlation Between Wrapped Bitcoin and Marinade
Can any of the company-specific risk be diversified away by investing in both Wrapped Bitcoin and Marinade 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 Marinade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wrapped Bitcoin and Marinade, you can compare the effects of market volatilities on Wrapped Bitcoin and Marinade 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 Marinade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wrapped Bitcoin and Marinade.
Diversification Opportunities for Wrapped Bitcoin and Marinade
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wrapped and Marinade is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Wrapped Bitcoin and Marinade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marinade 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 Marinade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marinade has no effect on the direction of Wrapped Bitcoin i.e., Wrapped Bitcoin and Marinade go up and down completely randomly.
Pair Corralation between Wrapped Bitcoin and Marinade
Assuming the 90 days trading horizon Wrapped Bitcoin is expected to generate 0.82 times more return on investment than Marinade. However, Wrapped Bitcoin is 1.22 times less risky than Marinade. It trades about 0.1 of its potential returns per unit of risk. Marinade is currently generating about 0.04 per unit of risk. If you would invest 1,683,933 in Wrapped Bitcoin on August 23, 2024 and sell it today you would earn a total of 8,165,652 from holding Wrapped Bitcoin or generate 484.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 50.17% |
| Values | Daily Returns |
Wrapped Bitcoin vs. Marinade
Performance |
| Timeline |
| Wrapped Bitcoin |
| Marinade |
Wrapped Bitcoin and Marinade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wrapped Bitcoin and Marinade
The main advantage of trading using opposite Wrapped Bitcoin and Marinade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wrapped Bitcoin position performs unexpectedly, Marinade 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 Marinade will offset losses from the drop in Marinade's long position.| Wrapped Bitcoin vs. Solana | Wrapped Bitcoin vs. XRP | Wrapped Bitcoin vs. Sui | Wrapped Bitcoin vs. Staked Ether |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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