Correlation Between BakeryToken and Beta Finance

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both BakeryToken and Beta Finance 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 BakeryToken and Beta Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BakeryToken and Beta Finance, you can compare the effects of market volatilities on BakeryToken and Beta Finance 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 BakeryToken with a short position of Beta Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of BakeryToken and Beta Finance.

Diversification Opportunities for BakeryToken and Beta Finance

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between BakeryToken and Beta Finance is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding BakeryToken and Beta Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beta Finance and BakeryToken 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 BakeryToken are associated (or correlated) with Beta Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beta Finance has no effect on the direction of BakeryToken i.e., BakeryToken and Beta Finance go up and down completely randomly.

Pair Corralation between BakeryToken and Beta Finance

Assuming the 90 days trading horizon BakeryToken is expected to under-perform the Beta Finance. But the crypto coin apears to be less risky and, when comparing its historical volatility, BakeryToken is 8.39 times less risky than Beta Finance. The crypto coin trades about -0.07 of its potential returns per unit of risk. The Beta Finance is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Beta Finance on February 22, 2022 and sell it today you would earn a total of  12.00  from holding Beta Finance or generate 9.223372036854776E16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy87.66%
ValuesDaily Returns

BakeryToken  vs.  Beta Finance

 Performance (%) 
      Timeline 
BakeryToken 
BakeryToken Performance
0 of 100
Over the last 90 days BakeryToken has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Crypto's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for BakeryToken investors.

BakeryToken Price Channel

Beta Finance 
Beta Finance Performance
0 of 100
Over the last 90 days Beta Finance 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 Beta Finance investors.

Beta Finance Price Channel

BakeryToken and Beta Finance Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with BakeryToken and Beta Finance

The main advantage of trading using opposite BakeryToken and Beta Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BakeryToken position performs unexpectedly, Beta Finance 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 Beta Finance will offset losses from the drop in Beta Finance's long position.
The idea behind BakeryToken and Beta Finance 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

Other Complementary Tools

Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go