Correlation Between Bitcoin Depot and Fiverr International

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

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

Diversification Opportunities for Bitcoin Depot and Fiverr International

0.65

Correlation Coefficient

Bitcoin Depot  Fiverr International

Poor diversification

The 3 months correlation between Bitcoin and Fiverr is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Depot and Fiverr International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiverr International and Bitcoin Depot 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 Depot are associated (or correlated) with Fiverr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiverr International has no effect on the direction of Bitcoin Depot i.e., Bitcoin Depot and Fiverr International go up and down completely randomly.

Pair Corralation between Bitcoin Depot and Fiverr International

Considering the 90-day investment horizon Bitcoin Depot is expected to generate 2.35 times more return on investment than Fiverr International. However, Bitcoin Depot is 2.35 times more volatile than Fiverr International. It trades about 0.08 of its potential returns per unit of risk. Fiverr International is currently generating about 0.16 per unit of risk. If you would invest  153.00  in Bitcoin Depot on September 1, 2024 and sell it today you would earn a total of  46.00  from holding Bitcoin Depot or generate 30.07% return on investment over 90 days.

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

Bitcoin Depot  vs.  Fiverr International

Bitcoin Depot

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Depot are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Bitcoin Depot displayed solid returns over the last few months and may actually be approaching a breakup point.

Fiverr International

Risk-Adjusted Performance

12 of 100

Good

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

Pair Trading with Bitcoin Depot and Fiverr International

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

The idea behind Bitcoin Depot and Fiverr International 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.