Correlation Between Electrovaya Common and BTC Digital
Can any of the company-specific risk be diversified away by investing in both Electrovaya Common and BTC Digital 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 Electrovaya Common and BTC Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrovaya Common Shares and BTC Digital, you can compare the effects of market volatilities on Electrovaya Common and BTC Digital 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 Electrovaya Common with a short position of BTC Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and BTC Digital.
Diversification Opportunities for Electrovaya Common and BTC Digital
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Electrovaya and BTC is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and BTC Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTC Digital and Electrovaya Common 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 Electrovaya Common Shares are associated (or correlated) with BTC Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTC Digital has no effect on the direction of Electrovaya Common i.e., Electrovaya Common and BTC Digital go up and down completely randomly.
Pair Corralation between Electrovaya Common and BTC Digital
Given the investment horizon of 90 days Electrovaya Common Shares is expected to generate 0.25 times more return on investment than BTC Digital. However, Electrovaya Common Shares is 3.93 times less risky than BTC Digital. It trades about 0.14 of its potential returns per unit of risk. BTC Digital is currently generating about -0.05 per unit of risk. If you would invest 218.00 in Electrovaya Common Shares on December 20, 2024 and sell it today you would earn a total of 67.00 from holding Electrovaya Common Shares or generate 30.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Electrovaya Common Shares vs. BTC Digital
Performance |
Timeline |
Electrovaya Common Shares |
BTC Digital |
Electrovaya Common and BTC Digital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Electrovaya Common and BTC Digital
The main advantage of trading using opposite Electrovaya Common and BTC Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrovaya Common position performs unexpectedly, BTC Digital 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 BTC Digital will offset losses from the drop in BTC Digital's long position.Electrovaya Common vs. Smithfield Foods, Common | Electrovaya Common vs. AMCON Distributing | Electrovaya Common vs. WK Kellogg Co | Electrovaya Common vs. One Group Hospitality |
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Check out your portfolio center.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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