Correlation Between Mercurity Fintech and BitFuFu

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

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

Diversification Opportunities for Mercurity Fintech and BitFuFu

-0.38

Correlation Coefficient

Mercurity Fintech  BitFuFu

Very good diversification

The 3 months correlation between Mercurity and BitFuFu is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mercurity Fintech Holding and BitFuFu Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFuFu Class A and Mercurity Fintech 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 Mercurity Fintech Holding are associated (or correlated) with BitFuFu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFuFu Class A has no effect on the direction of Mercurity Fintech i.e., Mercurity Fintech and BitFuFu go up and down completely randomly.

Pair Corralation between Mercurity Fintech and BitFuFu

Considering the 90-day investment horizon Mercurity Fintech Holding is expected to under-perform the BitFuFu. In addition to that, Mercurity Fintech is 1.68 times more volatile than BitFuFu Class A. It trades about -0.23 of its total potential returns per unit of risk. BitFuFu Class A is currently generating about 0.04 per unit of volatility. If you would invest  460.00  in BitFuFu Class A on August 13, 2024 and sell it today you would earn a total of  8.00  from holding BitFuFu Class A or generate 1.74% return on investment over 90 days.

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

Mercurity Fintech Holding  vs.  BitFuFu Class A

Mercurity Fintech Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mercurity Fintech Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Mercurity Fintech is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

BitFuFu Class A

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mercurity Fintech and BitFuFu

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

The idea behind Mercurity Fintech Holding and BitFuFu Class A 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.