Correlation Between Bitcoin and Samsung KODEX

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

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

Diversification Opportunities for Bitcoin and Samsung KODEX

-0.94

Correlation Coefficient

Bitcoin  Samsung KODEX

Pay attention - limited upside

The 3 months correlation between Bitcoin and Samsung is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Samsung KODEX IT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung KODEX IT 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 Samsung KODEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung KODEX IT has no effect on the direction of Bitcoin i.e., Bitcoin and Samsung KODEX go up and down completely randomly.

Pair Corralation between Bitcoin and Samsung KODEX

Assuming the 90 days trading horizon Bitcoin is expected to generate 1.85 times more return on investment than Samsung KODEX. However, Bitcoin is 1.85 times more volatile than Samsung KODEX IT. It trades about 0.21 of its potential returns per unit of risk. Samsung KODEX IT is currently generating about -0.07 per unit of risk. If you would invest  6,319,703  in Bitcoin on October 11, 2024 and sell it today you would earn a total of  3,181,291  from holding Bitcoin or generate 50.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

Bitcoin  vs.  Samsung KODEX IT

Bitcoin

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Samsung KODEX IT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsung KODEX IT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with Bitcoin and Samsung KODEX

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

The idea behind Bitcoin and Samsung KODEX IT 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.