Correlation Between Ameritrust Corp and Cathedra Bitcoin

Can any of the company-specific risk be diversified away by investing in both Ameritrust Corp and Cathedra Bitcoin 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 Ameritrust Corp and Cathedra Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Ameritrust Corp and Cathedra Bitcoin

0.3

Correlation Coefficient

Ameritrust Corp  Cathedra Bitcoin

Weak diversification

The 3 months correlation between Ameritrust and Cathedra is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ameritrust Corp and Cathedra Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathedra Bitcoin and Ameritrust Corp 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 Ameritrust Corp are associated (or correlated) with Cathedra Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathedra Bitcoin has no effect on the direction of Ameritrust Corp i.e., Ameritrust Corp and Cathedra Bitcoin go up and down completely randomly.

Pair Corralation between Ameritrust Corp and Cathedra Bitcoin

Given the investment horizon of 90 days Ameritrust Corp is expected to under-perform the Cathedra Bitcoin. In addition to that, Ameritrust Corp is 1.14 times more volatile than Cathedra Bitcoin. It trades about -0.13 of its total potential returns per unit of risk. Cathedra Bitcoin is currently generating about -0.08 per unit of volatility. If you would invest  5.69  in Cathedra Bitcoin on November 29, 2024 and sell it today you would lose (1.80) from holding Cathedra Bitcoin or give up 31.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.72%
Values	Daily Returns

Ameritrust Corp  vs.  Cathedra Bitcoin

Ameritrust Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ameritrust Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Cathedra Bitcoin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cathedra Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ameritrust Corp and Cathedra Bitcoin

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

The idea behind Ameritrust Corp and Cathedra Bitcoin 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.