Correlation Between Bitcoin and Brazil Real

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

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

Diversification Opportunities for Bitcoin and Brazil Real

0.0

Correlation Coefficient

Bitcoin  Brazil Real

Pay attention - limited upside

The 3 months correlation between Bitcoin and Brazil is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Brazil Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brazil Real Estate 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 Brazil Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brazil Real Estate has no effect on the direction of Bitcoin i.e., Bitcoin and Brazil Real go up and down completely randomly.

Pair Corralation between Bitcoin and Brazil Real

If you would invest (100.00) in Brazil Real Estate on December 21, 2024 and sell it today you would earn a total of  100.00  from holding Brazil Real Estate or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bitcoin  vs.  Brazil Real Estate

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.

Brazil Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brazil Real Estate has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong technical and fundamental indicators, Brazil Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bitcoin and Brazil Real

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

The idea behind Bitcoin and Brazil Real Estate 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.