Correlation Between Bitcoin and Nordnet One

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

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

Diversification Opportunities for Bitcoin and Nordnet One

0.44

Correlation Coefficient

Bitcoin  Nordnet One

Very weak diversification

The 3 months correlation between Bitcoin and Nordnet is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Nordnet One Balansert in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordnet One Balansert and Bitcoin 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 Bitcoin are associated (or correlated) with Nordnet One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordnet One Balansert has no effect on the direction of Bitcoin i.e., Bitcoin and Nordnet One go up and down completely randomly.

Pair Corralation between Bitcoin and Nordnet One

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the Nordnet One. In addition to that, Bitcoin is 5.15 times more volatile than Nordnet One Balansert. It trades about -0.08 of its total potential returns per unit of risk. Nordnet One Balansert is currently generating about -0.11 per unit of volatility. If you would invest  13,827  in Nordnet One Balansert on December 25, 2024 and sell it today you would lose (406.00) from holding Nordnet One Balansert or give up 2.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.65%
Values	Daily Returns

Bitcoin  vs.  Nordnet One Balansert

Bitcoin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Bitcoin shareholders.

Nordnet One Balansert

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordnet One Balansert has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable basic indicators, Nordnet One is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bitcoin and Nordnet One

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

The idea behind Bitcoin and Nordnet One Balansert 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.