Correlation Between Tether and Bounce

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

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

Diversification Opportunities for Tether and Bounce

0.0

Correlation Coefficient

Tether  Bounce

Pay attention - limited upside

The 3 months correlation between Tether and Bounce is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tether and Bounce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bounce and Tether 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 Tether are associated (or correlated) with Bounce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bounce has no effect on the direction of Tether i.e., Tether and Bounce go up and down completely randomly.

Pair Corralation between Tether and Bounce

If you would invest  1,790  in Bounce on January 3, 2025 and sell it today you would lose (450.00) from holding Bounce or give up 25.14% of portfolio value over 90 days.

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

Tether  vs.  Bounce

Tether

Risk-Adjusted Performance

Very Weak

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

Bounce

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bounce are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Bounce displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tether and Bounce

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

The idea behind Tether and Bounce 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.