Correlation Between Bittnet Systems and SCUT SA

Can any of the company-specific risk be diversified away by investing in both Bittnet Systems and SCUT SA 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 SCUT SA 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 SCUT SA BACAU, you can compare the effects of market volatilities on Bittnet Systems and SCUT SA 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 SCUT SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bittnet Systems and SCUT SA.

Diversification Opportunities for Bittnet Systems and SCUT SA

0.32

Correlation Coefficient

Bittnet Systems  SCUT SA

Weak diversification

The 3 months correlation between Bittnet and SCUT is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bittnet Systems SA and SCUT SA BACAU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCUT SA BACAU 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 SCUT SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCUT SA BACAU has no effect on the direction of Bittnet Systems i.e., Bittnet Systems and SCUT SA go up and down completely randomly.

Pair Corralation between Bittnet Systems and SCUT SA

Assuming the 90 days trading horizon Bittnet Systems is expected to generate 2.71 times less return on investment than SCUT SA. But when comparing it to its historical volatility, Bittnet Systems SA is 2.71 times less risky than SCUT SA. It trades about 0.19 of its potential returns per unit of risk. SCUT SA BACAU is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  2,360  in SCUT SA BACAU on December 21, 2024 and sell it today you would earn a total of  880.00  from holding SCUT SA BACAU or generate 37.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.21%
Values	Daily Returns

Bittnet Systems SA  vs.  SCUT SA BACAU

Bittnet Systems SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bittnet Systems SA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bittnet Systems displayed solid returns over the last few months and may actually be approaching a breakup point.

SCUT SA BACAU

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SCUT SA BACAU are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, SCUT SA displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bittnet Systems and SCUT SA

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

The idea behind Bittnet Systems SA and SCUT SA BACAU 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.