Correlation Between Bitcoin and Iberpapel Gestion

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

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

Diversification Opportunities for Bitcoin and Iberpapel Gestion

0.5

Correlation Coefficient

Bitcoin  Iberpapel Gestion

Very weak diversification

The 3 months correlation between Bitcoin and Iberpapel is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Iberpapel Gestion SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iberpapel Gestion 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 Iberpapel Gestion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iberpapel Gestion has no effect on the direction of Bitcoin i.e., Bitcoin and Iberpapel Gestion go up and down completely randomly.

Pair Corralation between Bitcoin and Iberpapel Gestion

Assuming the 90 days trading horizon Bitcoin is expected to generate 6.17 times more return on investment than Iberpapel Gestion. However, Bitcoin is 6.17 times more volatile than Iberpapel Gestion SA. It trades about 0.08 of its potential returns per unit of risk. Iberpapel Gestion SA is currently generating about 0.05 per unit of risk. If you would invest  2,278,992  in Bitcoin on October 11, 2024 and sell it today you would earn a total of  7,222,002  from holding Bitcoin or generate 316.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	59.16%
Values	Daily Returns

Bitcoin  vs.  Iberpapel Gestion SA

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.

Iberpapel Gestion

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Iberpapel Gestion SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Iberpapel Gestion is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bitcoin and Iberpapel Gestion

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

The idea behind Bitcoin and Iberpapel Gestion SA 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.