Correlation Between Hashflow USD and BK Variable

Can any of the company-specific risk be diversified away by investing in both Hashflow USD and BK Variable 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 Hashflow USD and BK Variable into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hashflow USD and BK Variable Internacional, you can compare the effects of market volatilities on Hashflow USD and BK Variable 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 Hashflow USD with a short position of BK Variable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hashflow USD and BK Variable.

Diversification Opportunities for Hashflow USD and BK Variable

0.71

Correlation Coefficient

Hashflow USD  BK Variable

Poor diversification

The 3 months correlation between Hashflow and 0P0000120T is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hashflow USD and BK Variable Internacional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BK Variable Internacional and Hashflow USD 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 Hashflow USD are associated (or correlated) with BK Variable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BK Variable Internacional has no effect on the direction of Hashflow USD i.e., Hashflow USD and BK Variable go up and down completely randomly.

Pair Corralation between Hashflow USD and BK Variable

Assuming the 90 days trading horizon Hashflow USD is expected to generate 1.28 times more return on investment than BK Variable. However, Hashflow USD is 1.28 times more volatile than BK Variable Internacional. It trades about 0.17 of its potential returns per unit of risk. BK Variable Internacional is currently generating about 0.13 per unit of risk. If you would invest  1,332  in Hashflow USD on October 27, 2024 and sell it today you would earn a total of  119.00  from holding Hashflow USD or generate 8.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	82.26%
Values	Daily Returns

Hashflow USD  vs.  BK Variable Internacional

Hashflow USD

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hashflow USD are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unsteady basic indicators, Hashflow USD may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BK Variable Internacional

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BK Variable Internacional are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, BK Variable may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Hashflow USD and BK Variable

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

The idea behind Hashflow USD and BK Variable Internacional 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.