Correlation Between Bitcoin and Avantium Holding

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

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

Diversification Opportunities for Bitcoin and Avantium Holding

0.44

Correlation Coefficient

Bitcoin  Avantium Holding

Very weak diversification

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

Pair Corralation between Bitcoin and Avantium Holding

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the Avantium Holding. In addition to that, Bitcoin is 1.1 times more volatile than Avantium Holding BV. It trades about -0.09 of its total potential returns per unit of risk. Avantium Holding BV is currently generating about -0.1 per unit of volatility. If you would invest  176.00  in Avantium Holding BV on December 22, 2024 and sell it today you would lose (24.00) from holding Avantium Holding BV or give up 13.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

Bitcoin  vs.  Avantium Holding BV

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 unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Bitcoin shareholders.

Avantium Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avantium Holding BV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Bitcoin and Avantium Holding

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

The idea behind Bitcoin and Avantium Holding BV 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.