Correlation Between Bitcoin and Adroit Infotech

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

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

Diversification Opportunities for Bitcoin and Adroit Infotech

0.04

Correlation Coefficient

Bitcoin  Adroit Infotech

Significant diversification

The 3 months correlation between Bitcoin and Adroit is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Adroit Infotech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adroit Infotech 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 Adroit Infotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adroit Infotech has no effect on the direction of Bitcoin i.e., Bitcoin and Adroit Infotech go up and down completely randomly.

Pair Corralation between Bitcoin and Adroit Infotech

Assuming the 90 days trading horizon Bitcoin is expected to generate 0.86 times more return on investment than Adroit Infotech. However, Bitcoin is 1.16 times less risky than Adroit Infotech. It trades about 0.22 of its potential returns per unit of risk. Adroit Infotech Limited is currently generating about -0.02 per unit of risk. If you would invest  6,657,777  in Bitcoin on October 24, 2024 and sell it today you would earn a total of  3,702,123  from holding Bitcoin or generate 55.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Bitcoin  vs.  Adroit Infotech Limited

Bitcoin

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 17 (%) 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.

Adroit Infotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adroit Infotech Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Adroit Infotech is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bitcoin and Adroit Infotech

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

The idea behind Bitcoin and Adroit Infotech Limited 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.