Correlation Between Bitcoin and COL Financial

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

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

Diversification Opportunities for Bitcoin and COL Financial

-0.53

Correlation Coefficient

Bitcoin  COL Financial

Excellent diversification

The 3 months correlation between Bitcoin and COL is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and COL Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COL Financial Group and 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 Bitcoin are associated (or correlated) with COL Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COL Financial Group has no effect on the direction of Bitcoin i.e., Bitcoin and COL Financial go up and down completely randomly.

Pair Corralation between Bitcoin and COL Financial

Assuming the 90 days trading horizon Bitcoin is expected to generate 1.13 times more return on investment than COL Financial. However, Bitcoin is 1.13 times more volatile than COL Financial Group. It trades about 0.32 of its potential returns per unit of risk. COL Financial Group is currently generating about -0.04 per unit of risk. If you would invest  10,548,100  in Bitcoin on April 14, 2025 and sell it today you would earn a total of  1,217,500  from holding Bitcoin or generate 11.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Bitcoin  vs.  COL Financial Group

Bitcoin

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

COL Financial Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days COL Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Bitcoin and COL Financial

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

The idea behind Bitcoin and COL Financial Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .