Correlation Between VINCI and BITM

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

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

Diversification Opportunities for VINCI and BITM

0.54

Correlation Coefficient

VINCI  BITM

Very weak diversification

The 3 months correlation between VINCI and BITM is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding VINCI and BITM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BITM and VINCI 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 VINCI are associated (or correlated) with BITM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BITM has no effect on the direction of VINCI i.e., VINCI and BITM go up and down completely randomly.

Pair Corralation between VINCI and BITM

If you would invest  734.00  in VINCI on August 30, 2024 and sell it today you would earn a total of  461.00  from holding VINCI or generate 62.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

VINCI  vs.  BITM

VINCI

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VINCI are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, VINCI exhibited solid returns over the last few months and may actually be approaching a breakup point.

BITM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BITM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, BITM is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VINCI and BITM

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

The idea behind VINCI and BITM 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.