Correlation Between MATIC and Bitcoin

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

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

Diversification Opportunities for MATIC and Bitcoin

0.29

Correlation Coefficient

MATIC  Bitcoin

Modest diversification

The 3 months correlation between MATIC and Bitcoin is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding MATIC and Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin and MATIC 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 MATIC are associated (or correlated) with Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin has no effect on the direction of MATIC i.e., MATIC and Bitcoin go up and down completely randomly.

Pair Corralation between MATIC and Bitcoin

Assuming the 90 days trading horizon MATIC is expected to under-perform the Bitcoin. In addition to that, MATIC is 2.77 times more volatile than Bitcoin. It trades about -0.04 of its total potential returns per unit of risk. Bitcoin is currently generating about 0.11 per unit of volatility. If you would invest  10,298,200  in Bitcoin on May 8, 2025 and sell it today you would earn a total of  1,206,100  from holding Bitcoin or generate 11.71% return on investment over 90 days.

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

MATIC  vs.  Bitcoin

MATIC

Risk-Adjusted Performance

Weakest

Over the last 90 days MATIC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for MATIC shareholders.

Bitcoin

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Bitcoin may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with MATIC and Bitcoin

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

The idea behind MATIC and Bitcoin 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.