Correlation Between MSCI and Bit Origin

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

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

Diversification Opportunities for MSCI and Bit Origin

-0.42

Correlation Coefficient

MSCI  Bit Origin

Very good diversification

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

Pair Corralation between MSCI and Bit Origin

Given the investment horizon of 90 days MSCI Inc is expected to generate 0.18 times more return on investment than Bit Origin. However, MSCI Inc is 5.54 times less risky than Bit Origin. It trades about 0.09 of its potential returns per unit of risk. Bit Origin is currently generating about -0.03 per unit of risk. If you would invest  57,196  in MSCI Inc on September 2, 2024 and sell it today you would earn a total of  3,767  from holding MSCI Inc or generate 6.59% return on investment over 90 days.

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

MSCI Inc  vs.  Bit Origin

MSCI Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MSCI Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, MSCI may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bit Origin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bit Origin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with MSCI and Bit Origin

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

The idea behind MSCI Inc and Bit Origin 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 CEOs Directory module to screen CEOs from public companies around the world.