Correlation Between Bit Origin and Danone SA
Can any of the company-specific risk be diversified away by investing in both Bit Origin and Danone SA 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 Danone SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bit Origin and Danone SA, you can compare the effects of market volatilities on Bit Origin and Danone SA 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 Danone SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bit Origin and Danone SA.
Diversification Opportunities for Bit Origin and Danone SA
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bit and Danone is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bit Origin and Danone SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danone SA 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 Danone SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danone SA has no effect on the direction of Bit Origin i.e., Bit Origin and Danone SA go up and down completely randomly.
Pair Corralation between Bit Origin and Danone SA
Given the investment horizon of 90 days Bit Origin is expected to under-perform the Danone SA. In addition to that, Bit Origin is 5.39 times more volatile than Danone SA. It trades about -0.3 of its total potential returns per unit of risk. Danone SA is currently generating about -0.18 per unit of volatility. If you would invest 6,875 in Danone SA on September 26, 2024 and sell it today you would lose (280.00) from holding Danone SA or give up 4.07% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Bit Origin vs. Danone SA
Performance |
Timeline |
Bit Origin |
Danone SA |
Bit Origin and Danone SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bit Origin and Danone SA
The main advantage of trading using opposite Bit Origin and Danone SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bit Origin position performs unexpectedly, Danone SA 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 Danone SA will offset losses from the drop in Danone SA's long position.Bit Origin vs. Better Choice | Bit Origin vs. Farmmi Inc | Bit Origin vs. Laird Superfood | Bit Origin vs. Planet Green Holdings |
Danone SA vs. Qed Connect | Danone SA vs. Branded Legacy | Danone SA vs. Yuenglings Ice Cream | Danone SA vs. Bit Origin |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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