Correlation Between Bit Digital and Enlivex Therapeutics

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

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

Diversification Opportunities for Bit Digital and Enlivex Therapeutics

0.17

Correlation Coefficient

Bit Digital  Enlivex Therapeutics

Average diversification

The 3 months correlation between Bit and Enlivex is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bit Digital and Enlivex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlivex Therapeutics and Bit Digital 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 Bit Digital are associated (or correlated) with Enlivex Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlivex Therapeutics has no effect on the direction of Bit Digital i.e., Bit Digital and Enlivex Therapeutics go up and down completely randomly.

Pair Corralation between Bit Digital and Enlivex Therapeutics

Given the investment horizon of 90 days Bit Digital is expected to generate 1.02 times more return on investment than Enlivex Therapeutics. However, Bit Digital is 1.02 times more volatile than Enlivex Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Enlivex Therapeutics is currently generating about 0.02 per unit of risk. If you would invest  216.00  in Bit Digital on August 13, 2024 and sell it today you would earn a total of  213.00  from holding Bit Digital or generate 98.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bit Digital  vs.  Enlivex Therapeutics

Bit Digital

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bit Digital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, Bit Digital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Enlivex Therapeutics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enlivex Therapeutics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, Enlivex Therapeutics is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Bit Digital and Enlivex Therapeutics

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

The idea behind Bit Digital and Enlivex Therapeutics 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 Transaction History module to view history of all your transactions and understand their impact on performance.