Correlation Between Coin Citadel and BitFrontier Capital

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

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

Diversification Opportunities for Coin Citadel and BitFrontier Capital

0.43

Correlation Coefficient

Coin Citadel  BitFrontier Capital

Very weak diversification

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

Pair Corralation between Coin Citadel and BitFrontier Capital

Given the investment horizon of 90 days Coin Citadel is expected to generate 1.4 times more return on investment than BitFrontier Capital. However, Coin Citadel is 1.4 times more volatile than BitFrontier Capital Holdings. It trades about 0.04 of its potential returns per unit of risk. BitFrontier Capital Holdings is currently generating about -0.01 per unit of risk. If you would invest  0.02  in Coin Citadel on December 29, 2024 and sell it today you would lose (0.01) from holding Coin Citadel or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Coin Citadel  vs.  BitFrontier Capital Holdings

Coin Citadel

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Coin Citadel are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Coin Citadel disclosed solid returns over the last few months and may actually be approaching a breakup point.

BitFrontier Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days BitFrontier Capital Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Coin Citadel and BitFrontier Capital

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

The idea behind Coin Citadel and BitFrontier Capital Holdings 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.