Correlation Between Bitkub Coin and SXP

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

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

Diversification Opportunities for Bitkub Coin and SXP

0.7

Correlation Coefficient

Bitkub Coin  SXP

Poor diversification

The 3 months correlation between Bitkub and SXP is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bitkub Coin and SXP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SXP and Bitkub Coin 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 Bitkub Coin are associated (or correlated) with SXP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SXP has no effect on the direction of Bitkub Coin i.e., Bitkub Coin and SXP go up and down completely randomly.

Pair Corralation between Bitkub Coin and SXP

Assuming the 90 days trading horizon Bitkub Coin is expected to generate 0.64 times more return on investment than SXP. However, Bitkub Coin is 1.56 times less risky than SXP. It trades about -0.09 of its potential returns per unit of risk. SXP is currently generating about -0.14 per unit of risk. If you would invest  199.00  in Bitkub Coin on December 29, 2024 and sell it today you would lose (37.00) from holding Bitkub Coin or give up 18.59% of portfolio value over 90 days.

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

Bitkub Coin  vs.  SXP

Bitkub Coin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bitkub Coin 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 fundamental drivers 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 Bitkub Coin shareholders.

SXP

Risk-Adjusted Performance

Very Weak

Over the last 90 days SXP 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 SXP shareholders.

Pair Trading with Bitkub Coin and SXP

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

The idea behind Bitkub Coin and SXP 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.