Correlation Between Bittensor and Aelf

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

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

Diversification Opportunities for Bittensor and Aelf

0.62

Correlation Coefficient

Bittensor  Aelf

Poor diversification

The 3 months correlation between Bittensor and Aelf is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bittensor and aelf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on aelf and Bittensor 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 Bittensor are associated (or correlated) with Aelf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of aelf has no effect on the direction of Bittensor i.e., Bittensor and Aelf go up and down completely randomly.

Pair Corralation between Bittensor and Aelf

Assuming the 90 days trading horizon Bittensor is expected to generate 1.97 times more return on investment than Aelf. However, Bittensor is 1.97 times more volatile than aelf. It trades about 0.07 of its potential returns per unit of risk. aelf is currently generating about -0.01 per unit of risk. If you would invest  35,790  in Bittensor on April 23, 2025 and sell it today you would earn a total of  5,600  from holding Bittensor or generate 15.65% return on investment over 90 days.

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

Bittensor  vs.  aelf

Bittensor

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bittensor are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Bittensor exhibited solid returns over the last few months and may actually be approaching a breakup point.

aelf

Risk-Adjusted Performance

Very Weak

Over the last 90 days aelf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Aelf is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bittensor and Aelf

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

The idea behind Bittensor and aelf 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.