Correlation Between Bit Digital and Evercore Partners

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

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

Diversification Opportunities for Bit Digital and Evercore Partners

0.84

Correlation Coefficient

Bit Digital  Evercore Partners

Very poor diversification

The 3 months correlation between Bit and Evercore is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bit Digital and Evercore Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evercore Partners and Bit Digital 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 Bit Digital are associated (or correlated) with Evercore Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evercore Partners has no effect on the direction of Bit Digital i.e., Bit Digital and Evercore Partners go up and down completely randomly.

Pair Corralation between Bit Digital and Evercore Partners

Given the investment horizon of 90 days Bit Digital is expected to generate 2.67 times more return on investment than Evercore Partners. However, Bit Digital is 2.67 times more volatile than Evercore Partners. It trades about 0.14 of its potential returns per unit of risk. Evercore Partners is currently generating about 0.17 per unit of risk. If you would invest  283.00  in Bit Digital on September 3, 2024 and sell it today you would earn a total of  178.00  from holding Bit Digital or generate 62.9% return on investment over 90 days.

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

Bit Digital  vs.  Evercore Partners

Bit Digital

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bit Digital are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, Bit Digital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Evercore Partners

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evercore Partners are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Evercore Partners reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bit Digital and Evercore Partners

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

The idea behind Bit Digital and Evercore Partners 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..