Correlation Between GDS Holdings and BIT Mining

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

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

Diversification Opportunities for GDS Holdings and BIT Mining

-0.76

Correlation Coefficient

GDS Holdings  BIT Mining

Pay attention - limited upside

The 3 months correlation between GDS and BIT is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding GDS Holdings and BIT Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Mining and GDS Holdings 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 GDS Holdings are associated (or correlated) with BIT Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Mining has no effect on the direction of GDS Holdings i.e., GDS Holdings and BIT Mining go up and down completely randomly.

Pair Corralation between GDS Holdings and BIT Mining

Considering the 90-day investment horizon GDS Holdings is expected to generate 1.67 times more return on investment than BIT Mining. However, GDS Holdings is 1.67 times more volatile than BIT Mining. It trades about 0.17 of its potential returns per unit of risk. BIT Mining is currently generating about -0.17 per unit of risk. If you would invest  2,001  in GDS Holdings on December 17, 2024 and sell it today you would earn a total of  1,526  from holding GDS Holdings or generate 76.26% return on investment over 90 days.

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

GDS Holdings  vs.  BIT Mining

GDS Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GDS Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, GDS Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

BIT Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days BIT Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with GDS Holdings and BIT Mining

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

The idea behind GDS Holdings and BIT Mining 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.