Correlation Between Bitcoin and FIBRA Prologis

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

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

Diversification Opportunities for Bitcoin and FIBRA Prologis

-0.46

Correlation Coefficient

Bitcoin  FIBRA Prologis

Very good diversification

The 3 months correlation between Bitcoin and FIBRA is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and FIBRA Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIBRA Prologis 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 FIBRA Prologis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIBRA Prologis has no effect on the direction of Bitcoin i.e., Bitcoin and FIBRA Prologis go up and down completely randomly.

Pair Corralation between Bitcoin and FIBRA Prologis

Assuming the 90 days trading horizon Bitcoin is expected to generate 1.77 times more return on investment than FIBRA Prologis. However, Bitcoin is 1.77 times more volatile than FIBRA Prologis. It trades about 0.08 of its potential returns per unit of risk. FIBRA Prologis is currently generating about -0.21 per unit of risk. If you would invest  8,804,054  in Bitcoin on October 11, 2024 and sell it today you would earn a total of  696,940  from holding Bitcoin or generate 7.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.02%
Values	Daily Returns

Bitcoin  vs.  FIBRA Prologis

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.

FIBRA Prologis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIBRA Prologis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bitcoin and FIBRA Prologis

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

The idea behind Bitcoin and FIBRA Prologis 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.