Correlation Between NEO and Bitcoin SV
Can any of the company-specific risk be diversified away by investing in both NEO and Bitcoin SV 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 NEO and Bitcoin SV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEO and Bitcoin SV, you can compare the effects of market volatilities on NEO and Bitcoin SV 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 NEO with a short position of Bitcoin SV. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEO and Bitcoin SV.
Diversification Opportunities for NEO and Bitcoin SV
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NEO and Bitcoin is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding NEO and Bitcoin SV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin SV and NEO 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 NEO are associated (or correlated) with Bitcoin SV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin SV has no effect on the direction of NEO i.e., NEO and Bitcoin SV go up and down completely randomly.
Pair Corralation between NEO and Bitcoin SV
Assuming the 90 days trading horizon NEO is expected to generate 0.94 times more return on investment than Bitcoin SV. However, NEO is 1.06 times less risky than Bitcoin SV. It trades about 0.03 of its potential returns per unit of risk. Bitcoin SV is currently generating about 0.02 per unit of risk. If you would invest 1,674 in NEO on January 19, 2024 and sell it today you would earn a total of 36.00 from holding NEO or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEO vs. Bitcoin SV
Performance |
| Timeline |
| NEO |
| Bitcoin SV |
NEO and Bitcoin SV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEO and Bitcoin SV
The main advantage of trading using opposite NEO and Bitcoin SV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEO position performs unexpectedly, Bitcoin SV 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 SV will offset losses from the drop in Bitcoin SV's long position.The idea behind NEO and Bitcoin SV 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |