Correlation Between WiSA Technologies and Bit Digital

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

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

Diversification Opportunities for WiSA Technologies and Bit Digital

0.31

Correlation Coefficient

WiSA Technologies  Bit Digital

Weak diversification

The 3 months correlation between WiSA and Bit is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding WiSA Technologies and Bit Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bit Digital and WiSA Technologies 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 WiSA Technologies are associated (or correlated) with Bit Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bit Digital has no effect on the direction of WiSA Technologies i.e., WiSA Technologies and Bit Digital go up and down completely randomly.

Pair Corralation between WiSA Technologies and Bit Digital

Given the investment horizon of 90 days WiSA Technologies is expected to generate 4.99 times more return on investment than Bit Digital. However, WiSA Technologies is 4.99 times more volatile than Bit Digital. It trades about 0.12 of its potential returns per unit of risk. Bit Digital is currently generating about 0.14 per unit of risk. If you would invest  136.00  in WiSA Technologies on July 4, 2024 and sell it today you would earn a total of  31.00  from holding WiSA Technologies or generate 22.79% return on investment over 90 days.

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

WiSA Technologies  vs.  Bit Digital

WiSA Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WiSA Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Bit Digital

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with WiSA Technologies and Bit Digital

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

The idea behind WiSA Technologies and Bit Digital 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.