Correlation Between BounceBit and ELEC

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

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

Diversification Opportunities for BounceBit and ELEC

0.61

Correlation Coefficient

BounceBit  ELEC

Poor diversification

The 3 months correlation between BounceBit and ELEC is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding BounceBit and ELEC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELEC and BounceBit 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 BounceBit are associated (or correlated) with ELEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELEC has no effect on the direction of BounceBit i.e., BounceBit and ELEC go up and down completely randomly.

Pair Corralation between BounceBit and ELEC

Assuming the 90 days horizon BounceBit is expected to generate 2.51 times more return on investment than ELEC. However, BounceBit is 2.51 times more volatile than ELEC. It trades about 0.14 of its potential returns per unit of risk. ELEC is currently generating about 0.16 per unit of risk. If you would invest  10.00  in BounceBit on July 10, 2025 and sell it today you would earn a total of  9.00  from holding BounceBit or generate 90.0% return on investment over 90 days.

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

BounceBit  vs.  ELEC

BounceBit

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BounceBit are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, BounceBit exhibited solid returns over the last few months and may actually be approaching a breakup point.

ELEC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ELEC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, ELEC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BounceBit and ELEC

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

The idea behind BounceBit and ELEC 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.