Correlation Between Bitcoin SV and FTX Token

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

Diversification Opportunities for Bitcoin SV and FTX Token

0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between Bitcoin and FTX is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin SV and FTX Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTX Token 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 FTX Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTX Token has no effect on the direction of Bitcoin SV i.e., Bitcoin SV and FTX Token go up and down completely randomly.

Pair Corralation between Bitcoin SV and FTX Token

Assuming the 90 days trading horizon Bitcoin SV is expected to generate 1.7 times less return on investment than FTX Token. But when comparing it to its historical volatility, Bitcoin SV is 1.79 times less risky than FTX Token. It trades about 0.05 of its potential returns per unit of risk. FTX Token is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  130.00  in FTX Token on January 24, 2024 and sell it today you would earn a total of  25.00  from holding FTX Token or generate 19.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Bitcoin SV  vs.  FTX Token

 Performance 
       Timeline  
Bitcoin SV 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin SV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Bitcoin SV exhibited solid returns over the last few months and may actually be approaching a breakup point.
FTX Token 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days FTX Token has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for FTX Token shareholders.

Bitcoin SV and FTX Token Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bitcoin SV and FTX Token

The main advantage of trading using opposite Bitcoin SV and FTX Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin SV position performs unexpectedly, FTX Token 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 FTX Token will offset losses from the drop in FTX Token's long position.
The idea behind Bitcoin SV and FTX Token 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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