Correlation Between Top KingWin and BitFuFu Warrant

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

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

Diversification Opportunities for Top KingWin and BitFuFu Warrant

0.46

Correlation Coefficient

Top KingWin  BitFuFu Warrant

Very weak diversification

The 3 months correlation between Top and BitFuFu is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Top KingWin and BitFuFu Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFuFu Warrant and Top KingWin 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 Top KingWin are associated (or correlated) with BitFuFu Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFuFu Warrant has no effect on the direction of Top KingWin i.e., Top KingWin and BitFuFu Warrant go up and down completely randomly.

Pair Corralation between Top KingWin and BitFuFu Warrant

Considering the 90-day investment horizon Top KingWin is expected to under-perform the BitFuFu Warrant. But the stock apears to be less risky and, when comparing its historical volatility, Top KingWin is 2.31 times less risky than BitFuFu Warrant. The stock trades about -0.17 of its potential returns per unit of risk. The BitFuFu Warrant is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  55.00  in BitFuFu Warrant on December 27, 2024 and sell it today you would lose (2.00) from holding BitFuFu Warrant or give up 3.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.0%
Values	Daily Returns

Top KingWin  vs.  BitFuFu Warrant

Top KingWin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Top KingWin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

BitFuFu Warrant

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BitFuFu Warrant are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, BitFuFu Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Top KingWin and BitFuFu Warrant

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

The idea behind Top KingWin and BitFuFu Warrant 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.