Correlation Between BNT and Immutable

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

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

Diversification Opportunities for BNT and Immutable

0.97

Correlation Coefficient

BNT  Immutable

Almost no diversification

The 3 months correlation between BNT and Immutable is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding BNT and Immutable X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immutable X and BNT 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 BNT are associated (or correlated) with Immutable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immutable X has no effect on the direction of BNT i.e., BNT and Immutable go up and down completely randomly.

Pair Corralation between BNT and Immutable

Assuming the 90 days trading horizon BNT is expected to generate 0.72 times more return on investment than Immutable. However, BNT is 1.4 times less risky than Immutable. It trades about -0.13 of its potential returns per unit of risk. Immutable X is currently generating about -0.18 per unit of risk. If you would invest  65.00  in BNT on December 30, 2024 and sell it today you would lose (24.00) from holding BNT or give up 36.92% of portfolio value over 90 days.

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

BNT  vs.  Immutable X

BNT

Risk-Adjusted Performance

Very Weak

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

Immutable X

Risk-Adjusted Performance

Very Weak

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

Pair Trading with BNT and Immutable

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

The idea behind BNT and Immutable X 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.