Correlation Between BIGtoken and U Swirl

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

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

Diversification Opportunities for BIGtoken and U Swirl

1.0

Correlation Coefficient

BIGtoken  U Swirl

No risk reduction

The 3 months correlation between BIGtoken and SWRL is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding BIGtoken and U Swirl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Swirl and BIGtoken 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 BIGtoken are associated (or correlated) with U Swirl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Swirl has no effect on the direction of BIGtoken i.e., BIGtoken and U Swirl go up and down completely randomly.

Pair Corralation between BIGtoken and U Swirl

If you would invest  0.05  in U Swirl on January 31, 2024 and sell it today you would lose (0.03) from holding U Swirl or give up 60.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	34.85%
Values	Daily Returns

BIGtoken  vs.  U Swirl

BIGtoken

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BIGtoken has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, BIGtoken is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

U Swirl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days U Swirl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, U Swirl is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with BIGtoken and U Swirl

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

The idea behind BIGtoken and U Swirl 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.