Correlation Between Bitcoin and 40434LAL9

Can any of the company-specific risk be diversified away by investing in both Bitcoin and 40434LAL9 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 40434LAL9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bitcoin and HPQ 42 15 APR 32, you can compare the effects of market volatilities on Bitcoin and 40434LAL9 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 40434LAL9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and 40434LAL9.

Diversification Opportunities for Bitcoin and 40434LAL9

-0.39

Correlation Coefficient

Bitcoin  40434LAL9

Very good diversification

The 3 months correlation between Bitcoin and 40434LAL9 is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and HPQ 42 15 APR 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HPQ 42 15 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 40434LAL9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HPQ 42 15 has no effect on the direction of Bitcoin i.e., Bitcoin and 40434LAL9 go up and down completely randomly.

Pair Corralation between Bitcoin and 40434LAL9

Assuming the 90 days trading horizon Bitcoin is expected to generate 5.2 times more return on investment than 40434LAL9. However, Bitcoin is 5.2 times more volatile than HPQ 42 15 APR 32. It trades about 0.13 of its potential returns per unit of risk. HPQ 42 15 APR 32 is currently generating about -0.05 per unit of risk. If you would invest  5,923,106  in Bitcoin on October 10, 2024 and sell it today you would earn a total of  3,777,231  from holding Bitcoin or generate 63.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.64%
Values	Daily Returns

Bitcoin  vs.  HPQ 42 15 APR 32

Bitcoin

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 17 (%) 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.

HPQ 42 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HPQ 42 15 APR 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HPQ 42 15 APR 32 investors.

Pair Trading with Bitcoin and 40434LAL9

The main advantage of trading using opposite Bitcoin and 40434LAL9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, 40434LAL9 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 40434LAL9 will offset losses from the drop in 40434LAL9's long position.

The idea behind Bitcoin and HPQ 42 15 APR 32 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.