Correlation Between Bit Digital and Moelis

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

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

Diversification Opportunities for Bit Digital and Moelis

0.09

Correlation Coefficient

Bit Digital  Moelis

Significant diversification

The 3 months correlation between Bit and Moelis is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bit Digital and Moelis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moelis 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 Moelis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moelis has no effect on the direction of Bit Digital i.e., Bit Digital and Moelis go up and down completely randomly.

Pair Corralation between Bit Digital and Moelis

Given the investment horizon of 90 days Bit Digital is expected to generate 3.35 times more return on investment than Moelis. However, Bit Digital is 3.35 times more volatile than Moelis Co. It trades about 0.14 of its potential returns per unit of risk. Moelis Co is currently generating about 0.14 per unit of risk. If you would invest  283.00  in Bit Digital on July 4, 2024 and sell it today you would earn a total of  42.00  from holding Bit Digital or generate 14.84% 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.  Moelis Co

Bit Digital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bit Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Bit Digital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Moelis

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Moelis Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Moelis exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bit Digital and Moelis

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

The idea behind Bit Digital and Moelis Co 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.