Correlation Between XTRA Bitcoin and Jefferies Financial

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

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

Diversification Opportunities for XTRA Bitcoin and Jefferies Financial

-0.3

Correlation Coefficient

XTRA Bitcoin  Jefferies Financial

Very good diversification

The 3 months correlation between XTRA and Jefferies is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding XTRA Bitcoin and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial and XTRA Bitcoin 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 XTRA Bitcoin are associated (or correlated) with Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of XTRA Bitcoin i.e., XTRA Bitcoin and Jefferies Financial go up and down completely randomly.

Pair Corralation between XTRA Bitcoin and Jefferies Financial

Given the investment horizon of 90 days XTRA Bitcoin is expected to generate 5.21 times more return on investment than Jefferies Financial. However, XTRA Bitcoin is 5.21 times more volatile than Jefferies Financial Group. It trades about 0.03 of its potential returns per unit of risk. Jefferies Financial Group is currently generating about 0.09 per unit of risk. If you would invest  0.22  in XTRA Bitcoin on October 26, 2024 and sell it today you would lose (0.10) from holding XTRA Bitcoin or give up 45.45% of portfolio value over 90 days.

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

XTRA Bitcoin  vs.  Jefferies Financial Group

XTRA Bitcoin

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in XTRA Bitcoin are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, XTRA Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Jefferies Financial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jefferies Financial Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Jefferies Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XTRA Bitcoin and Jefferies Financial

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

The idea behind XTRA Bitcoin and Jefferies Financial Group 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.