Correlation Between BTT and Jito

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

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

Diversification Opportunities for BTT and Jito

0.0

Correlation Coefficient

BTT  Jito

Pay attention - limited upside

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

Pair Corralation between BTT and Jito

Assuming the 90 days trading horizon BTT is expected to generate 12.4 times more return on investment than Jito. However, BTT is 12.4 times more volatile than Jito. It trades about 0.07 of its potential returns per unit of risk. Jito is currently generating about 0.03 per unit of risk. 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.  Jito

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.

Jito

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jito 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 Jito shareholders.

Pair Trading with BTT and Jito

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

The idea behind BTT and Jito 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.