Correlation Between Alephim and Bitcoin

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Can any of the company-specific risk be diversified away by investing in both Alephim and Bitcoin 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 Alephim and Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alephim and Bitcoin, you can compare the effects of market volatilities on Alephim and Bitcoin 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 Alephim with a short position of Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alephim and Bitcoin.

Diversification Opportunities for Alephim and Bitcoin

0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Alephim and Bitcoin is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aleph.im and Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin and Alephim 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 Alephim are associated (or correlated) with Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin has no effect on the direction of Alephim i.e., Alephim and Bitcoin go up and down completely randomly.

Pair Corralation between Alephim and Bitcoin

Assuming the 90 days trading horizon Alephim is expected to under-perform the Bitcoin. In addition to that, Alephim is 1.69 times more volatile than Bitcoin. It trades about -0.03 of its total potential returns per unit of risk. Bitcoin is currently generating about 0.07 per unit of volatility. If you would invest  952,375  in Bitcoin on February 21, 2022 and sell it today you would earn a total of  1,987,004  from holding Bitcoin or generate 208.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy29.71%
ValuesDaily Returns

Aleph.im  vs.  Bitcoin

 Performance (%) 
      Timeline 
Alephim 
Alephim Performance
0 of 100
Over the last 90 days Alephim has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in June 2022. The current disturbance may also be a sign of long term up-swing for Alephim investors.

Alephim Price Channel

Bitcoin 
Bitcoin Performance
0 of 100
Over the last 90 days Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in June 2022. The current disturbance may also be a sign of long term up-swing for Bitcoin investors.

Bitcoin Price Channel

Alephim and Bitcoin Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Alephim and Bitcoin

The main advantage of trading using opposite Alephim and Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alephim position performs unexpectedly, Bitcoin 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 Bitcoin will offset losses from the drop in Bitcoin's long position.
The idea behind Alephim and Bitcoin 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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