Correlation Between Wrapped Bitcoin and Wrapped Beacon
Can any of the company-specific risk be diversified away by investing in both Wrapped Bitcoin and Wrapped Beacon 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 Wrapped Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wrapped Bitcoin and Wrapped Beacon ETH, you can compare the effects of market volatilities on Wrapped Bitcoin and Wrapped Beacon 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 Wrapped Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wrapped Bitcoin and Wrapped Beacon.
Diversification Opportunities for Wrapped Bitcoin and Wrapped Beacon
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wrapped and Wrapped is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Wrapped Bitcoin and Wrapped Beacon ETH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wrapped Beacon ETH 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 Wrapped Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wrapped Beacon ETH has no effect on the direction of Wrapped Bitcoin i.e., Wrapped Bitcoin and Wrapped Beacon go up and down completely randomly.
Pair Corralation between Wrapped Bitcoin and Wrapped Beacon
Assuming the 90 days trading horizon Wrapped Bitcoin is expected to generate 0.78 times more return on investment than Wrapped Beacon. However, Wrapped Bitcoin is 1.28 times less risky than Wrapped Beacon. It trades about 0.08 of its potential returns per unit of risk. Wrapped Beacon ETH is currently generating about 0.0 per unit of risk. If you would invest 6,928,895 in Wrapped Bitcoin on November 5, 2024 and sell it today you would earn a total of 3,133,105 from holding Wrapped Bitcoin or generate 45.22% 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. Wrapped Beacon ETH
Performance |
| Timeline |
| Wrapped Bitcoin |
| Wrapped Beacon ETH |
Wrapped Bitcoin and Wrapped Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wrapped Bitcoin and Wrapped Beacon
The main advantage of trading using opposite Wrapped Bitcoin and Wrapped Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wrapped Bitcoin position performs unexpectedly, Wrapped Beacon 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 Wrapped Beacon will offset losses from the drop in Wrapped Beacon's long position.| Wrapped Bitcoin vs. Staked Ether | Wrapped Bitcoin vs. Cronos | Wrapped Bitcoin vs. Monero | Wrapped Bitcoin vs. Tether |
| Wrapped Beacon vs. Wrapped eETH | Wrapped Beacon vs. Staked Ether | Wrapped Beacon vs. Phala Network | Wrapped Beacon vs. EigenLayer |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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