Correlation Between Bitcoin and Western Asset
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Western Asset 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 Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Western Asset Mortgage, you can compare the effects of market volatilities on Bitcoin and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Western Asset.
Diversification Opportunities for Bitcoin and Western Asset
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bitcoin and Western is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Western Asset Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Mortgage 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Mortgage has no effect on the direction of Bitcoin i.e., Bitcoin and Western Asset go up and down completely randomly.
Pair Corralation between Bitcoin and Western Asset
If you would invest (100.00) in Western Asset Mortgage on October 10, 2024 and sell it today you would earn a total of 100.00 from holding Western Asset Mortgage or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Bitcoin vs. Western Asset Mortgage
Performance |
Timeline |
Bitcoin |
Western Asset Mortgage |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bitcoin and Western Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bitcoin and Western Asset
The main advantage of trading using opposite Bitcoin and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.The idea behind Bitcoin and Western Asset Mortgage 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.Western Asset vs. Huber Capital Diversified | Western Asset vs. Wells Fargo Diversified | Western Asset vs. Thrivent Diversified Income | Western Asset vs. Guidepath Conservative Income |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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