Correlation Between MicroAlgo and Bakkt Holdings

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

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

Diversification Opportunities for MicroAlgo and Bakkt Holdings

-0.42

Correlation Coefficient

MicroAlgo  Bakkt Holdings

Very good diversification

The 3 months correlation between MicroAlgo and Bakkt is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding MicroAlgo and Bakkt Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakkt Holdings and MicroAlgo 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 MicroAlgo are associated (or correlated) with Bakkt Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakkt Holdings has no effect on the direction of MicroAlgo i.e., MicroAlgo and Bakkt Holdings go up and down completely randomly.

Pair Corralation between MicroAlgo and Bakkt Holdings

Given the investment horizon of 90 days MicroAlgo is expected to generate 9.24 times more return on investment than Bakkt Holdings. However, MicroAlgo is 9.24 times more volatile than Bakkt Holdings. It trades about 0.15 of its potential returns per unit of risk. Bakkt Holdings is currently generating about -0.14 per unit of risk. If you would invest  407.00  in MicroAlgo on December 29, 2024 and sell it today you would earn a total of  1,187  from holding MicroAlgo or generate 291.65% return on investment over 90 days.

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

MicroAlgo  vs.  Bakkt Holdings

MicroAlgo

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MicroAlgo are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, MicroAlgo displayed solid returns over the last few months and may actually be approaching a breakup point.

Bakkt Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bakkt Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with MicroAlgo and Bakkt Holdings

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

The idea behind MicroAlgo and Bakkt 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.