Correlation Between First BITCoin and Cal-Bay Intl

Can any of the company-specific risk be diversified away by investing in both First BITCoin and Cal-Bay Intl 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 First BITCoin and Cal-Bay Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First BITCoin Capital and Cal Bay Intl, you can compare the effects of market volatilities on First BITCoin and Cal-Bay Intl 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 First BITCoin with a short position of Cal-Bay Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of First BITCoin and Cal-Bay Intl.

Diversification Opportunities for First BITCoin and Cal-Bay Intl

1.0

Correlation Coefficient

First BITCoin  Cal-Bay Intl

No risk reduction

The 3 months correlation between First and Cal-Bay is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding First BITCoin Capital and Cal Bay Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Bay Intl and First BITCoin 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 First BITCoin Capital are associated (or correlated) with Cal-Bay Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Bay Intl has no effect on the direction of First BITCoin i.e., First BITCoin and Cal-Bay Intl go up and down completely randomly.

Pair Corralation between First BITCoin and Cal-Bay Intl

If you would invest  0.01  in Cal Bay Intl on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Cal Bay Intl or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

First BITCoin Capital  vs.  Cal Bay Intl

First BITCoin Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First BITCoin Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, First BITCoin is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Cal Bay Intl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cal Bay Intl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Cal-Bay Intl is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with First BITCoin and Cal-Bay Intl

The main advantage of trading using opposite First BITCoin and Cal-Bay Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First BITCoin position performs unexpectedly, Cal-Bay Intl 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 Cal-Bay Intl will offset losses from the drop in Cal-Bay Intl's long position.

The idea behind First BITCoin Capital and Cal Bay Intl 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.