Correlation Between BIT Computer and Raphas Co

Can any of the company-specific risk be diversified away by investing in both BIT Computer and Raphas Co 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 BIT Computer and Raphas Co into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BIT Computer Co and Raphas Co, you can compare the effects of market volatilities on BIT Computer and Raphas Co 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 BIT Computer with a short position of Raphas Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIT Computer and Raphas Co.

Diversification Opportunities for BIT Computer and Raphas Co

0.74

Correlation Coefficient

BIT Computer  Raphas Co

Poor diversification

The 3 months correlation between BIT and Raphas is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding BIT Computer Co and Raphas Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raphas Co and BIT Computer 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 BIT Computer Co are associated (or correlated) with Raphas Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raphas Co has no effect on the direction of BIT Computer i.e., BIT Computer and Raphas Co go up and down completely randomly.

Pair Corralation between BIT Computer and Raphas Co

Assuming the 90 days trading horizon BIT Computer Co is expected to generate 0.35 times more return on investment than Raphas Co. However, BIT Computer Co is 2.83 times less risky than Raphas Co. It trades about -0.01 of its potential returns per unit of risk. Raphas Co is currently generating about -0.06 per unit of risk. If you would invest  512,000  in BIT Computer Co on September 15, 2024 and sell it today you would lose (11,000) from holding BIT Computer Co or give up 2.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

BIT Computer Co  vs.  Raphas Co

BIT Computer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BIT Computer Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BIT Computer is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Raphas Co

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raphas Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with BIT Computer and Raphas Co

The main advantage of trading using opposite BIT Computer and Raphas Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIT Computer position performs unexpectedly, Raphas Co 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 Raphas Co will offset losses from the drop in Raphas Co's long position.

The idea behind BIT Computer Co and Raphas Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.