Correlation Between Bitcoin and CaliberCos

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

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

Diversification Opportunities for Bitcoin and CaliberCos

-0.6

Correlation Coefficient

Bitcoin  CaliberCos

Excellent diversification

The 3 months correlation between Bitcoin and CaliberCos is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and CaliberCos Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaliberCos Class A 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 CaliberCos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaliberCos Class A has no effect on the direction of Bitcoin i.e., Bitcoin and CaliberCos go up and down completely randomly.

Pair Corralation between Bitcoin and CaliberCos

Assuming the 90 days trading horizon Bitcoin is expected to generate 0.53 times more return on investment than CaliberCos. However, Bitcoin is 1.87 times less risky than CaliberCos. It trades about 0.21 of its potential returns per unit of risk. CaliberCos Class A is currently generating about 0.06 per unit of risk. If you would invest  6,251,742  in Bitcoin on October 10, 2024 and sell it today you would earn a total of  3,249,252  from holding Bitcoin or generate 51.97% return on investment over 90 days.

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

Bitcoin  vs.  CaliberCos Class A

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.

CaliberCos Class A

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CaliberCos Class A are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, CaliberCos exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bitcoin and CaliberCos

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

The idea behind Bitcoin and CaliberCos Class A 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.