Correlation Between BTC Digital and Gevo

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

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

Diversification Opportunities for BTC Digital and Gevo

-0.41

Correlation Coefficient

BTC Digital  Gevo

Very good diversification

The 3 months correlation between BTC and Gevo is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding BTC Digital and Gevo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gevo Inc and BTC 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 BTC Digital are associated (or correlated) with Gevo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gevo Inc has no effect on the direction of BTC Digital i.e., BTC Digital and Gevo go up and down completely randomly.

Pair Corralation between BTC Digital and Gevo

Given the investment horizon of 90 days BTC Digital is expected to under-perform the Gevo. In addition to that, BTC Digital is 1.24 times more volatile than Gevo Inc. It trades about -0.06 of its total potential returns per unit of risk. Gevo Inc is currently generating about 0.07 per unit of volatility. If you would invest  108.00  in Gevo Inc on May 7, 2025 and sell it today you would earn a total of  15.00  from holding Gevo Inc or generate 13.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BTC Digital  vs.  Gevo Inc

BTC Digital

Risk-Adjusted Performance

Very Weak

Over the last 90 days BTC Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Gevo Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gevo Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Gevo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BTC Digital and Gevo

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

The idea behind BTC Digital and Gevo Inc 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.