Correlation Between Hedera Hashgraph and BTM
Can any of the company-specific risk be diversified away by investing in both Hedera Hashgraph and BTM 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 Hedera Hashgraph and BTM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hedera Hashgraph and BTM, you can compare the effects of market volatilities on Hedera Hashgraph and BTM 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 Hedera Hashgraph with a short position of BTM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hedera Hashgraph and BTM.
Diversification Opportunities for Hedera Hashgraph and BTM
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hedera and BTM is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hedera Hashgraph and BTM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTM and Hedera Hashgraph 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 Hedera Hashgraph are associated (or correlated) with BTM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTM has no effect on the direction of Hedera Hashgraph i.e., Hedera Hashgraph and BTM go up and down completely randomly.
Pair Corralation between Hedera Hashgraph and BTM
Assuming the 90 days trading horizon Hedera Hashgraph is expected to under-perform the BTM. In addition to that, Hedera Hashgraph is 1.3 times more volatile than BTM. It trades about -0.16 of its total potential returns per unit of risk. BTM is currently generating about 0.02 per unit of volatility. If you would invest 1.00 in BTM on January 20, 2024 and sell it today you would lose (0.01) from holding BTM or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hedera Hashgraph vs. BTM
Performance |
| Timeline |
| Hedera Hashgraph |
| BTM |
Hedera Hashgraph and BTM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hedera Hashgraph and BTM
The main advantage of trading using opposite Hedera Hashgraph and BTM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hedera Hashgraph position performs unexpectedly, BTM 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 BTM will offset losses from the drop in BTM's long position.| Hedera Hashgraph vs. Ethereum | Hedera Hashgraph vs. Solana | Hedera Hashgraph vs. XRP | Hedera Hashgraph vs. The Open Network |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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