Correlation Between Bitcoin and Abacus FCF
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Abacus FCF 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 Abacus FCF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Abacus FCF Leaders, you can compare the effects of market volatilities on Bitcoin and Abacus FCF 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 Abacus FCF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Abacus FCF.
Diversification Opportunities for Bitcoin and Abacus FCF
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bitcoin and Abacus is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Abacus FCF Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abacus FCF Leaders 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 Abacus FCF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abacus FCF Leaders has no effect on the direction of Bitcoin i.e., Bitcoin and Abacus FCF go up and down completely randomly.
Pair Corralation between Bitcoin and Abacus FCF
Assuming the 90 days trading horizon Bitcoin is expected to generate 2.6 times more return on investment than Abacus FCF. However, Bitcoin is 2.6 times more volatile than Abacus FCF Leaders. It trades about 0.02 of its potential returns per unit of risk. Abacus FCF Leaders is currently generating about -0.21 per unit of risk. If you would invest 9,665,788 in Bitcoin on October 10, 2024 and sell it today you would earn a total of 34,549 from holding Bitcoin or generate 0.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Bitcoin vs. Abacus FCF Leaders
Performance |
Timeline |
Bitcoin |
Abacus FCF Leaders |
Bitcoin and Abacus FCF Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bitcoin and Abacus FCF
The main advantage of trading using opposite Bitcoin and Abacus FCF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Abacus FCF 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 Abacus FCF will offset losses from the drop in Abacus FCF's long position.The idea behind Bitcoin and Abacus FCF Leaders 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.Abacus FCF vs. FT Vest Equity | Abacus FCF vs. Zillow Group Class | Abacus FCF vs. Northern Lights | Abacus FCF vs. VanEck Vectors Moodys |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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