Correlation Between Paiute Oil and BitFuFu

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

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

Diversification Opportunities for Paiute Oil and BitFuFu

0.0

Correlation Coefficient

Paiute Oil  BitFuFu

Pay attention - limited upside

The 3 months correlation between Paiute and BitFuFu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Paiute Oil Mining 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 Paiute Oil 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 Paiute Oil Mining 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 Paiute Oil i.e., Paiute Oil and BitFuFu go up and down completely randomly.

Pair Corralation between Paiute Oil and BitFuFu

If you would invest  443.00  in BitFuFu Class A on September 5, 2024 and sell it today you would earn a total of  82.00  from holding BitFuFu Class A or generate 18.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Paiute Oil Mining  vs.  BitFuFu Class A

Paiute Oil Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paiute Oil Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Paiute Oil is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

BitFuFu Class A

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BitFuFu Class A are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, BitFuFu unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Paiute Oil and BitFuFu

The main advantage of trading using opposite Paiute Oil and BitFuFu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paiute Oil 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 Paiute Oil Mining 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.