Correlation Between American Aires and Bitmine Immersion

Can any of the company-specific risk be diversified away by investing in both American Aires and Bitmine Immersion 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 American Aires and Bitmine Immersion into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Aires and Bitmine Immersion Technologies, you can compare the effects of market volatilities on American Aires and Bitmine Immersion 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 American Aires with a short position of Bitmine Immersion. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Aires and Bitmine Immersion.

Diversification Opportunities for American Aires and Bitmine Immersion

0.68

Correlation Coefficient

American Aires  Bitmine Immersion

Poor diversification

The 3 months correlation between American and Bitmine is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding American Aires and Bitmine Immersion Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitmine Immersion and American Aires 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 American Aires are associated (or correlated) with Bitmine Immersion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitmine Immersion has no effect on the direction of American Aires i.e., American Aires and Bitmine Immersion go up and down completely randomly.

Pair Corralation between American Aires and Bitmine Immersion

Assuming the 90 days horizon American Aires is expected to under-perform the Bitmine Immersion. But the pink sheet apears to be less risky and, when comparing its historical volatility, American Aires is 3.52 times less risky than Bitmine Immersion. The pink sheet trades about -0.18 of its potential returns per unit of risk. The Bitmine Immersion Technologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  58.00  in Bitmine Immersion Technologies on September 3, 2024 and sell it today you would lose (21.00) from holding Bitmine Immersion Technologies or give up 36.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

American Aires  vs.  Bitmine Immersion Technologies

American Aires

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Aires 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 nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Bitmine Immersion

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bitmine Immersion Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bitmine Immersion reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Aires and Bitmine Immersion

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

The idea behind American Aires and Bitmine Immersion Technologies 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.