Correlation Between Bitwise Core and Superior Plus

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

By analyzing existing cross correlation between Bitwise Core Bitcoin and Superior Plus Corp, you can compare the effects of market volatilities on Bitwise Core and Superior Plus 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 Bitwise Core with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise Core and Superior Plus.

Diversification Opportunities for Bitwise Core and Superior Plus

-0.66

Correlation Coefficient

Bitwise Core  Superior Plus

Excellent diversification

The 3 months correlation between Bitwise and Superior is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise Core Bitcoin and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and Bitwise Core 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 Bitwise Core Bitcoin are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Bitwise Core i.e., Bitwise Core and Superior Plus go up and down completely randomly.

Pair Corralation between Bitwise Core and Superior Plus

Assuming the 90 days trading horizon Bitwise Core Bitcoin is expected to generate 0.96 times more return on investment than Superior Plus. However, Bitwise Core Bitcoin is 1.05 times less risky than Superior Plus. It trades about 0.28 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.05 per unit of risk. If you would invest  565.00  in Bitwise Core Bitcoin on October 8, 2024 and sell it today you would earn a total of  388.00  from holding Bitwise Core Bitcoin or generate 68.67% return on investment over 90 days.

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

Bitwise Core Bitcoin  vs.  Superior Plus Corp

Bitwise Core Bitcoin

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitwise Core Bitcoin are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Bitwise Core exhibited solid returns over the last few months and may actually be approaching a breakup point.

Superior Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Bitwise Core and Superior Plus

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

The idea behind Bitwise Core Bitcoin and Superior Plus Corp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.