Correlation Between Bittensor and Cosmos

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

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

Diversification Opportunities for Bittensor and Cosmos

0.92

Correlation Coefficient

Bittensor  Cosmos

Almost no diversification

The 3 months correlation between Bittensor and Cosmos is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bittensor and Cosmos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos and Bittensor 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 Bittensor are associated (or correlated) with Cosmos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos has no effect on the direction of Bittensor i.e., Bittensor and Cosmos go up and down completely randomly.

Pair Corralation between Bittensor and Cosmos

Assuming the 90 days trading horizon Bittensor is expected to under-perform the Cosmos. In addition to that, Bittensor is 1.66 times more volatile than Cosmos. It trades about -0.01 of its total potential returns per unit of risk. Cosmos is currently generating about -0.01 per unit of volatility. If you would invest  509.00  in Cosmos on May 13, 2025 and sell it today you would lose (36.00) from holding Cosmos or give up 7.07% of portfolio value over 90 days.

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

Bittensor  vs.  Cosmos

Bittensor

Risk-Adjusted Performance

Weakest

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

Cosmos

Risk-Adjusted Performance

Weakest

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

Pair Trading with Bittensor and Cosmos

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

The idea behind Bittensor and Cosmos 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.