Correlation Between Wrapped Bitcoin and EXPAND

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

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

Diversification Opportunities for Wrapped Bitcoin and EXPAND

0.88

Correlation Coefficient

Wrapped Bitcoin  EXPAND

Very poor diversification

The 3 months correlation between Wrapped and EXPAND is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Wrapped Bitcoin and EXPAND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXPAND and Wrapped Bitcoin 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 Wrapped Bitcoin are associated (or correlated) with EXPAND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXPAND has no effect on the direction of Wrapped Bitcoin i.e., Wrapped Bitcoin and EXPAND go up and down completely randomly.

Pair Corralation between Wrapped Bitcoin and EXPAND

Assuming the 90 days trading horizon Wrapped Bitcoin is expected to generate 3.63 times less return on investment than EXPAND. But when comparing it to its historical volatility, Wrapped Bitcoin is 2.11 times less risky than EXPAND. It trades about 0.17 of its potential returns per unit of risk. EXPAND is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  0.01  in EXPAND on May 16, 2025 and sell it today you would earn a total of  0.00  from holding EXPAND or generate 88.0% return on investment over 90 days.

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

Wrapped Bitcoin  vs.  EXPAND

Wrapped Bitcoin

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wrapped Bitcoin are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Wrapped Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

EXPAND

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EXPAND are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, EXPAND sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wrapped Bitcoin and EXPAND

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

The idea behind Wrapped Bitcoin and EXPAND 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.