Correlation Between Wrapped Bitcoin and Alpha Finance

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

Diversification Opportunities for Wrapped Bitcoin and Alpha Finance

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Wrapped and Alpha is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Wrapped Bitcoin and Alpha Finance Lab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Finance Lab 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 Alpha Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Finance Lab has no effect on the direction of Wrapped Bitcoin i.e., Wrapped Bitcoin and Alpha Finance go up and down completely randomly.

Pair Corralation between Wrapped Bitcoin and Alpha Finance

Assuming the 90 days trading horizon Wrapped Bitcoin is expected to under-perform the Alpha Finance. But the crypto coin apears to be less risky and, when comparing its historical volatility, Wrapped Bitcoin is 1.53 times less risky than Alpha Finance. The crypto coin trades about -0.17 of its potential returns per unit of risk. The Alpha Finance Lab is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  15.00  in Alpha Finance Lab on March 27, 2022 and sell it today you would lose (2.00)  from holding Alpha Finance Lab or give up 13.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Wrapped Bitcoin  vs.  Alpha Finance Lab

 Performance (%) 
      Timeline 
Wrapped Bitcoin 
Wrapped Performance
0 of 100
Over the last 90 days Wrapped 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 July 2022. The current disturbance may also be a sign of long term up-swing for Wrapped Bitcoin investors.

Wrapped Price Channel

Alpha Finance Lab 
Alpha Performance
0 of 100
Over the last 90 days Alpha Finance Lab 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 technical indicators remain somewhat strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for Alpha Finance Lab investors.

Alpha Price Channel

Wrapped Bitcoin and Alpha Finance Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Wrapped Bitcoin and Alpha Finance

The main advantage of trading using opposite Wrapped Bitcoin and Alpha Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wrapped Bitcoin position performs unexpectedly, Alpha 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 Alpha Finance will offset losses from the drop in Alpha Finance's long position.
The idea behind Wrapped Bitcoin and Alpha Finance Lab 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

Other Complementary Tools

Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go