Correlation Between SEALSQ Corp and BitFuFu

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

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

Diversification Opportunities for SEALSQ Corp and BitFuFu

0.24

Correlation Coefficient

SEALSQ Corp  BitFuFu

Modest diversification

The 3 months correlation between SEALSQ and BitFuFu is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding SEALSQ Corp and BitFuFu Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFuFu Class A and SEALSQ Corp 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 SEALSQ Corp are associated (or correlated) with BitFuFu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFuFu Class A has no effect on the direction of SEALSQ Corp i.e., SEALSQ Corp and BitFuFu go up and down completely randomly.

Pair Corralation between SEALSQ Corp and BitFuFu

Given the investment horizon of 90 days SEALSQ Corp is expected to generate 4.35 times more return on investment than BitFuFu. However, SEALSQ Corp is 4.35 times more volatile than BitFuFu Class A. It trades about 0.38 of its potential returns per unit of risk. BitFuFu Class A is currently generating about 0.11 per unit of risk. If you would invest  38.00  in SEALSQ Corp on October 6, 2024 and sell it today you would earn a total of  776.00  from holding SEALSQ Corp or generate 2042.11% return on investment over 90 days.

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

SEALSQ Corp  vs.  BitFuFu Class A

SEALSQ Corp

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SEALSQ Corp are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, SEALSQ Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

BitFuFu Class A

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BitFuFu Class A are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, BitFuFu unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SEALSQ Corp and BitFuFu

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

The idea behind SEALSQ Corp and BitFuFu Class A 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.