Correlation Between Bon Natural and Bit Origin

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

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

Diversification Opportunities for Bon Natural and Bit Origin

0.81

Correlation Coefficient

Bon Natural  Bit Origin

Very poor diversification

The 3 months correlation between Bon and Bit is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bon Natural Life and Bit Origin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bit Origin and Bon Natural 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 Bon Natural Life are associated (or correlated) with Bit Origin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bit Origin has no effect on the direction of Bon Natural i.e., Bon Natural and Bit Origin go up and down completely randomly.

Pair Corralation between Bon Natural and Bit Origin

Considering the 90-day investment horizon Bon Natural Life is expected to under-perform the Bit Origin. But the stock apears to be less risky and, when comparing its historical volatility, Bon Natural Life is 1.25 times less risky than Bit Origin. The stock trades about -0.14 of its potential returns per unit of risk. The Bit Origin is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  94.00  in Bit Origin on December 26, 2024 and sell it today you would lose (68.00) from holding Bit Origin or give up 72.34% of portfolio value over 90 days.

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

Bon Natural Life  vs.  Bit Origin

Bon Natural Life

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bon Natural Life 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 Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Bit Origin

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Bon Natural and Bit Origin

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

The idea behind Bon Natural Life and Bit Origin 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.

Check out your portfolio center.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.