Correlation Between XTRA Bitcoin and CryptoStar Corp

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

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

Diversification Opportunities for XTRA Bitcoin and CryptoStar Corp

0.68

Correlation Coefficient

XTRA Bitcoin  CryptoStar Corp

Poor diversification

The 3 months correlation between XTRA and CryptoStar is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding XTRA Bitcoin and CryptoStar Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryptoStar Corp and XTRA 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 XTRA Bitcoin are associated (or correlated) with CryptoStar Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryptoStar Corp has no effect on the direction of XTRA Bitcoin i.e., XTRA Bitcoin and CryptoStar Corp go up and down completely randomly.

Pair Corralation between XTRA Bitcoin and CryptoStar Corp

Given the investment horizon of 90 days XTRA Bitcoin is expected to generate 10.49 times less return on investment than CryptoStar Corp. But when comparing it to its historical volatility, XTRA Bitcoin is 1.31 times less risky than CryptoStar Corp. It trades about 0.01 of its potential returns per unit of risk. CryptoStar Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.83  in CryptoStar Corp on September 12, 2025 and sell it today you would lose (0.17) from holding CryptoStar Corp or give up 20.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

XTRA Bitcoin  vs.  CryptoStar Corp

XTRA Bitcoin

Risk-Adjusted Performance

Weakest

Over the last 90 days XTRA Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, XTRA Bitcoin is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

CryptoStar Corp

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in CryptoStar Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CryptoStar Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XTRA Bitcoin and CryptoStar Corp

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

The idea behind XTRA Bitcoin and CryptoStar Corp 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.