Correlation Between Xp and Bit Digital
Can any of the company-specific risk be diversified away by investing in both Xp and Bit Digital 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 Xp and Bit Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and Bit Digital, you can compare the effects of market volatilities on Xp and Bit Digital 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 Xp with a short position of Bit Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and Bit Digital.
Diversification Opportunities for Xp and Bit Digital
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xp and Bit is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and Bit Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bit Digital and Xp 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 Xp Inc are associated (or correlated) with Bit Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bit Digital has no effect on the direction of Xp i.e., Xp and Bit Digital go up and down completely randomly.
Pair Corralation between Xp and Bit Digital
Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the Bit Digital. But the stock apears to be less risky and, when comparing its historical volatility, Xp Inc is 3.73 times less risky than Bit Digital. The stock trades about -0.23 of its potential returns per unit of risk. The Bit Digital is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 431.00 in Bit Digital on August 28, 2024 and sell it today you would lose (6.00) from holding Bit Digital or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xp Inc vs. Bit Digital
Performance |
| Timeline |
| Xp Inc |
| Bit Digital |
Xp and Bit Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xp and Bit Digital
The main advantage of trading using opposite Xp and Bit Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp position performs unexpectedly, Bit Digital 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 Digital will offset losses from the drop in Bit Digital's long position.| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
| Bit Digital vs. Scully Royalty | Bit Digital vs. Donnelley Financial Solutions | Bit Digital vs. Heritage Global | Bit Digital vs. Oppenheimer Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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