Correlation Between NSAV Holding and XTRA Bitcoin

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

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

Diversification Opportunities for NSAV Holding and XTRA Bitcoin

-0.56

Correlation Coefficient

NSAV Holding  XTRA Bitcoin

Excellent diversification

The 3 months correlation between NSAV and XTRA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding NSAV Holding and XTRA Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTRA Bitcoin and NSAV Holding 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 NSAV Holding are associated (or correlated) with XTRA Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTRA Bitcoin has no effect on the direction of NSAV Holding i.e., NSAV Holding and XTRA Bitcoin go up and down completely randomly.

Pair Corralation between NSAV Holding and XTRA Bitcoin

Given the investment horizon of 90 days NSAV Holding is expected to generate 1.99 times less return on investment than XTRA Bitcoin. In addition to that, NSAV Holding is 2.6 times more volatile than XTRA Bitcoin. It trades about 0.02 of its total potential returns per unit of risk. XTRA Bitcoin is currently generating about 0.11 per unit of volatility. If you would invest  0.09  in XTRA Bitcoin on September 3, 2024 and sell it today you would earn a total of  0.05  from holding XTRA Bitcoin or generate 55.56% return on investment over 90 days.

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

NSAV Holding  vs.  XTRA Bitcoin

NSAV Holding

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NSAV Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, NSAV Holding showed solid returns over the last few months and may actually be approaching a breakup point.

XTRA Bitcoin

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in XTRA Bitcoin are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, XTRA Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NSAV Holding and XTRA Bitcoin

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

The idea behind NSAV Holding and XTRA Bitcoin 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.