Correlation Between Bit Origin and Nichirei

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

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

Diversification Opportunities for Bit Origin and Nichirei

-0.43

Correlation Coefficient

Bit Origin  Nichirei

Very good diversification

The 3 months correlation between Bit and Nichirei is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bit Origin and Nichirei in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nichirei 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 Nichirei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nichirei has no effect on the direction of Bit Origin i.e., Bit Origin and Nichirei go up and down completely randomly.

Pair Corralation between Bit Origin and Nichirei

Given the investment horizon of 90 days Bit Origin is expected to under-perform the Nichirei. In addition to that, Bit Origin is 41.79 times more volatile than Nichirei. It trades about -0.16 of its total potential returns per unit of risk. Nichirei is currently generating about 0.13 per unit of volatility. If you would invest  1,196  in Nichirei on September 26, 2024 and sell it today you would earn a total of  14.00  from holding Nichirei or generate 1.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Bit Origin  vs.  Nichirei

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.

Nichirei

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nichirei are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Nichirei is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bit Origin and Nichirei

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

The idea behind Bit Origin and Nichirei 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.