Correlation Between Bitcoin and NIKKON HOLDINGS

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

By analyzing existing cross correlation between Bitcoin and NIKKON HOLDINGS TD, you can compare the effects of market volatilities on Bitcoin and NIKKON HOLDINGS 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 NIKKON HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and NIKKON HOLDINGS.

Diversification Opportunities for Bitcoin and NIKKON HOLDINGS

-0.65

Correlation Coefficient

Bitcoin  NIKKON HOLDINGS

Excellent diversification

The 3 months correlation between Bitcoin and NIKKON is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and NIKKON HOLDINGS TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKKON HOLDINGS TD 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 NIKKON HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIKKON HOLDINGS TD has no effect on the direction of Bitcoin i.e., Bitcoin and NIKKON HOLDINGS go up and down completely randomly.

Pair Corralation between Bitcoin and NIKKON HOLDINGS

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the NIKKON HOLDINGS. In addition to that, Bitcoin is 1.37 times more volatile than NIKKON HOLDINGS TD. It trades about -0.07 of its total potential returns per unit of risk. NIKKON HOLDINGS TD is currently generating about 0.29 per unit of volatility. If you would invest  1,200  in NIKKON HOLDINGS TD on December 21, 2024 and sell it today you would earn a total of  420.00  from holding NIKKON HOLDINGS TD or generate 35.0% return on investment over 90 days.

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

Bitcoin  vs.  NIKKON HOLDINGS TD

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.

NIKKON HOLDINGS TD

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NIKKON HOLDINGS TD are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, NIKKON HOLDINGS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bitcoin and NIKKON HOLDINGS

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

The idea behind Bitcoin and NIKKON HOLDINGS TD 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.