Correlation Between Bit Origin and Archer Daniels

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

By analyzing existing cross correlation between Bit Origin and Archer Daniels Midland, you can compare the effects of market volatilities on Bit Origin and Archer Daniels 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 Bit Origin with a short position of Archer Daniels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bit Origin and Archer Daniels.

Diversification Opportunities for Bit Origin and Archer Daniels

0.79

Correlation Coefficient

Bit Origin  Archer Daniels

Poor diversification

The 3 months correlation between Bit and Archer is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bit Origin and Archer Daniels Midland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Daniels Midland and Bit Origin 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 Bit Origin are associated (or correlated) with Archer Daniels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Daniels Midland has no effect on the direction of Bit Origin i.e., Bit Origin and Archer Daniels go up and down completely randomly.

Pair Corralation between Bit Origin and Archer Daniels

Given the investment horizon of 90 days Bit Origin is expected to under-perform the Archer Daniels. In addition to that, Bit Origin is 4.76 times more volatile than Archer Daniels Midland. It trades about -0.34 of its total potential returns per unit of risk. Archer Daniels Midland is currently generating about -0.04 per unit of volatility. If you would invest  5,222  in Archer Daniels Midland on September 17, 2024 and sell it today you would lose (53.00) from holding Archer Daniels Midland or give up 1.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Bit Origin  vs.  Archer Daniels Midland

Bit Origin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bit Origin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Archer Daniels Midland

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Archer Daniels Midland has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Bit Origin and Archer Daniels

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

The idea behind Bit Origin and Archer Daniels Midland 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.