Correlation Between Bittnet Systems and Infinity Capital

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Can any of the company-specific risk be diversified away by investing in both Bittnet Systems and Infinity Capital 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 Bittnet Systems and Infinity Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bittnet Systems SA and Infinity Capital Investments, you can compare the effects of market volatilities on Bittnet Systems and Infinity Capital 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 Bittnet Systems with a short position of Infinity Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bittnet Systems and Infinity Capital.

Diversification Opportunities for Bittnet Systems and Infinity Capital

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Bittnet and Infinity is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bittnet Systems SA and Infinity Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinity Capital Inv and Bittnet Systems 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 Bittnet Systems SA are associated (or correlated) with Infinity Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinity Capital Inv has no effect on the direction of Bittnet Systems i.e., Bittnet Systems and Infinity Capital go up and down completely randomly.

Pair Corralation between Bittnet Systems and Infinity Capital

Assuming the 90 days trading horizon Bittnet Systems SA is expected to under-perform the Infinity Capital. In addition to that, Bittnet Systems is 5.56 times more volatile than Infinity Capital Investments. It trades about -0.09 of its total potential returns per unit of risk. Infinity Capital Investments is currently generating about 0.25 per unit of volatility. If you would invest  237.00  in Infinity Capital Investments on October 7, 2024 and sell it today you would earn a total of  6.00  from holding Infinity Capital Investments or generate 2.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Bittnet Systems SA  vs.  Infinity Capital Investments

 Performance 
       Timeline  
Bittnet Systems SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bittnet Systems SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
Infinity Capital Inv 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Infinity Capital Investments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Infinity Capital is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Bittnet Systems and Infinity Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bittnet Systems and Infinity Capital

The main advantage of trading using opposite Bittnet Systems and Infinity Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bittnet Systems position performs unexpectedly, Infinity Capital 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 Infinity Capital will offset losses from the drop in Infinity Capital's long position.
The idea behind Bittnet Systems SA and Infinity Capital Investments 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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