Correlation Between Bitcoin SV and AION

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

Diversification Opportunities for Bitcoin SV and AION

0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Bitcoin and AION is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin SV and AION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AION and Bitcoin SV 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 Bitcoin SV are associated (or correlated) with AION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AION has no effect on the direction of Bitcoin SV i.e., Bitcoin SV and AION go up and down completely randomly.

Pair Corralation between Bitcoin SV and AION

Assuming the 90 days trading horizon Bitcoin SV is expected to generate 83.13 times less return on investment than AION. But when comparing it to its historical volatility, Bitcoin SV is 32.02 times less risky than AION. It trades about 0.08 of its potential returns per unit of risk. AION is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  7.20  in AION on December 29, 2023 and sell it today you would lose (6.65) from holding AION or give up 92.32% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Bitcoin SV  vs.  AION

 Performance 
       Timeline  
Bitcoin SV 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin SV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Bitcoin SV may actually be approaching a critical reversion point that can send shares even higher in April 2024.
AION 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in AION are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, AION exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bitcoin SV and AION Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bitcoin SV and AION

The main advantage of trading using opposite Bitcoin SV and AION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin SV position performs unexpectedly, AION 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 AION will offset losses from the drop in AION's long position.
The idea behind Bitcoin SV and AION 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 the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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