Correlation Between Up Fintech and Bit Digital

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

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

Diversification Opportunities for Up Fintech and Bit Digital

-0.47

Correlation Coefficient

Up Fintech  Bit Digital

Very good diversification

The 3 months correlation between TIGR and Bit is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Up Fintech Holding and Bit Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bit Digital and Up Fintech 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 Up Fintech Holding are associated (or correlated) with Bit Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bit Digital has no effect on the direction of Up Fintech i.e., Up Fintech and Bit Digital go up and down completely randomly.

Pair Corralation between Up Fintech and Bit Digital

Given the investment horizon of 90 days Up Fintech Holding is expected to generate 1.03 times more return on investment than Bit Digital. However, Up Fintech is 1.03 times more volatile than Bit Digital. It trades about 0.08 of its potential returns per unit of risk. Bit Digital is currently generating about -0.08 per unit of risk. If you would invest  725.00  in Up Fintech Holding on December 26, 2024 and sell it today you would earn a total of  158.00  from holding Up Fintech Holding or generate 21.79% return on investment over 90 days.

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

Up Fintech Holding  vs.  Bit Digital

Up Fintech Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Up Fintech Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical and fundamental indicators, Up Fintech reported solid returns over the last few months and may actually be approaching a breakup point.

Bit Digital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bit Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers 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 Up Fintech and Bit Digital

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

The idea behind Up Fintech Holding and Bit Digital 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.