Correlation Between Bitcoin and Starguide

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

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

Diversification Opportunities for Bitcoin and Starguide

0.2

Correlation Coefficient

Bitcoin  Starguide

Modest diversification

The 3 months correlation between Bitcoin and Starguide is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Starguide Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starguide Group 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 Starguide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starguide Group has no effect on the direction of Bitcoin i.e., Bitcoin and Starguide go up and down completely randomly.

Pair Corralation between Bitcoin and Starguide

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the Starguide. But the crypto coin apears to be less risky and, when comparing its historical volatility, Bitcoin is 62.21 times less risky than Starguide. The crypto coin trades about -0.09 of its potential returns per unit of risk. The Starguide Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  4.16  in Starguide Group on December 23, 2024 and sell it today you would lose (3.97) from holding Starguide Group or give up 95.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bitcoin  vs.  Starguide Group

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.

Starguide Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Starguide Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Starguide reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bitcoin and Starguide

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

The idea behind Bitcoin and Starguide Group 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.