Correlation Between Vodka Brands and Bitcoin Depot

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

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

Diversification Opportunities for Vodka Brands and Bitcoin Depot

0.41

Correlation Coefficient

Vodka Brands  Bitcoin Depot

Very weak diversification

The 3 months correlation between Vodka and Bitcoin is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Vodka Brands Corp and Bitcoin Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Depot and Vodka Brands 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 Vodka Brands Corp are associated (or correlated) with Bitcoin Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Depot has no effect on the direction of Vodka Brands i.e., Vodka Brands and Bitcoin Depot go up and down completely randomly.

Pair Corralation between Vodka Brands and Bitcoin Depot

Given the investment horizon of 90 days Vodka Brands Corp is expected to under-perform the Bitcoin Depot. But the pink sheet apears to be less risky and, when comparing its historical volatility, Vodka Brands Corp is 4.28 times less risky than Bitcoin Depot. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Bitcoin Depot is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  193.00  in Bitcoin Depot on September 17, 2024 and sell it today you would earn a total of  2.00  from holding Bitcoin Depot or generate 1.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Vodka Brands Corp  vs.  Bitcoin Depot

Vodka Brands Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vodka Brands Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Vodka Brands is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bitcoin Depot

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Depot are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bitcoin Depot displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vodka Brands and Bitcoin Depot

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

The idea behind Vodka Brands Corp and Bitcoin Depot 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.