Correlation Between Bitcoin and Homerun Resources

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

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

Diversification Opportunities for Bitcoin and Homerun Resources

-0.36

Correlation Coefficient

Bitcoin  Homerun Resources

Very good diversification

The 3 months correlation between Bitcoin and Homerun is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Homerun Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homerun Resources 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 Homerun Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homerun Resources has no effect on the direction of Bitcoin i.e., Bitcoin and Homerun Resources go up and down completely randomly.

Pair Corralation between Bitcoin and Homerun Resources

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the Homerun Resources. But the crypto coin apears to be less risky and, when comparing its historical volatility, Bitcoin is 2.04 times less risky than Homerun Resources. The crypto coin trades about -0.09 of its potential returns per unit of risk. The Homerun Resources is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  128.00  in Homerun Resources on December 22, 2024 and sell it today you would lose (18.00) from holding Homerun Resources or give up 14.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Bitcoin  vs.  Homerun Resources

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.

Homerun Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Homerun Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Bitcoin and Homerun Resources

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

The idea behind Bitcoin and Homerun Resources 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.

Check out your portfolio center.

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 CEOs Directory module to screen CEOs from public companies around the world.