Correlation Between Pi Network and BounceBit

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

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

Diversification Opportunities for Pi Network and BounceBit

0.78

Correlation Coefficient

Pi Network  BounceBit

Poor diversification

The 3 months correlation between Pi Network and BounceBit is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Pi Network and BounceBit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BounceBit and Pi Network 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 Pi Network are associated (or correlated) with BounceBit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BounceBit has no effect on the direction of Pi Network i.e., Pi Network and BounceBit go up and down completely randomly.

Pair Corralation between Pi Network and BounceBit

Assuming the 90 days horizon Pi Network is expected to under-perform the BounceBit. But the crypto coin apears to be less risky and, when comparing its historical volatility, Pi Network is 1.43 times less risky than BounceBit. The crypto coin trades about -0.16 of its potential returns per unit of risk. The BounceBit is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  8.05  in BounceBit on April 28, 2025 and sell it today you would earn a total of  2.95  from holding BounceBit or generate 36.65% return on investment over 90 days.

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

Pi Network  vs.  BounceBit

Pi Network

Risk-Adjusted Performance

Very Weak

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

BounceBit

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Pi Network and BounceBit

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

The idea behind Pi Network and BounceBit 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.

Check out your portfolio center.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.