Correlation Between BTT and DIA

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

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

Diversification Opportunities for BTT and DIA

0.0

Correlation Coefficient

BTT  DIA

Pay attention - limited upside

The 3 months correlation between BTT and DIA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BTT and DIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIA and BTT 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 BTT are associated (or correlated) with DIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIA has no effect on the direction of BTT i.e., BTT and DIA go up and down completely randomly.

Pair Corralation between BTT and DIA

If you would invest  0.00  in BTT on December 28, 2024 and sell it today you would earn a total of  0.00  from holding BTT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BTT  vs.  DIA

BTT

Risk-Adjusted Performance

Very Weak

Over the last 90 days BTT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BTT is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

DIA

Risk-Adjusted Performance

Very Weak

Over the last 90 days DIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for DIA shareholders.

Pair Trading with BTT and DIA

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

The idea behind BTT and DIA 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.