Correlation Between Wrapped Bitcoin and CEMEX SAB
Can any of the company-specific risk be diversified away by investing in both Wrapped Bitcoin and CEMEX SAB 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 Wrapped Bitcoin and CEMEX SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wrapped Bitcoin and CEMEX SAB de, you can compare the effects of market volatilities on Wrapped Bitcoin and CEMEX SAB 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 Wrapped Bitcoin with a short position of CEMEX SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wrapped Bitcoin and CEMEX SAB.
Diversification Opportunities for Wrapped Bitcoin and CEMEX SAB
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wrapped and CEMEX is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Wrapped Bitcoin and CEMEX SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEMEX SAB de and Wrapped Bitcoin 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 Wrapped Bitcoin are associated (or correlated) with CEMEX SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEMEX SAB de has no effect on the direction of Wrapped Bitcoin i.e., Wrapped Bitcoin and CEMEX SAB go up and down completely randomly.
Pair Corralation between Wrapped Bitcoin and CEMEX SAB
Assuming the 90 days trading horizon Wrapped Bitcoin is expected to generate 0.64 times more return on investment than CEMEX SAB. However, Wrapped Bitcoin is 1.55 times less risky than CEMEX SAB. It trades about -0.11 of its potential returns per unit of risk. CEMEX SAB de is currently generating about -0.13 per unit of risk. If you would invest 6,546,026 in Wrapped Bitcoin on January 31, 2024 and sell it today you would lose (396,824) from holding Wrapped Bitcoin or give up 6.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Wrapped Bitcoin vs. CEMEX SAB de
Performance |
Timeline |
Wrapped Bitcoin |
CEMEX SAB de |
Wrapped Bitcoin and CEMEX SAB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wrapped Bitcoin and CEMEX SAB
The main advantage of trading using opposite Wrapped Bitcoin and CEMEX SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wrapped Bitcoin position performs unexpectedly, CEMEX SAB 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 CEMEX SAB will offset losses from the drop in CEMEX SAB's long position.Wrapped Bitcoin vs. Solana | Wrapped Bitcoin vs. XRP | Wrapped Bitcoin vs. Staked Ether | Wrapped Bitcoin vs. The Open Network |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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