Correlation Between Bitcoin and Maj Invest

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

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

Diversification Opportunities for Bitcoin and Maj Invest

-0.67

Correlation Coefficient

Bitcoin  Maj Invest

Excellent diversification

The 3 months correlation between Bitcoin and Maj is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Maj Invest UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest UCITS 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 Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest UCITS has no effect on the direction of Bitcoin i.e., Bitcoin and Maj Invest go up and down completely randomly.

Pair Corralation between Bitcoin and Maj Invest

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the Maj Invest. In addition to that, Bitcoin is 2.72 times more volatile than Maj Invest UCITS. It trades about -0.09 of its total potential returns per unit of risk. Maj Invest UCITS is currently generating about 0.26 per unit of volatility. If you would invest  11,120  in Maj Invest UCITS on December 21, 2024 and sell it today you would earn a total of  1,580  from holding Maj Invest UCITS or generate 14.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	92.19%
Values	Daily Returns

Bitcoin  vs.  Maj Invest UCITS

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.

Maj Invest UCITS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Maj Invest UCITS are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking indicators, Maj Invest sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bitcoin and Maj Invest

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

The idea behind Bitcoin and Maj Invest UCITS 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.