Correlation Between Bitcoin and SUKU

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

By analyzing existing cross correlation between Bitcoin and SUKU, you can compare the effects of market volatilities on Bitcoin and SUKU 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 SUKU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and SUKU.

Diversification Opportunities for Bitcoin and SUKU

0.75

Correlation Coefficient

Bitcoin  SUKU

Poor diversification

The 3 months correlation between Bitcoin and SUKU is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and SUKU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUKU 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 SUKU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUKU has no effect on the direction of Bitcoin i.e., Bitcoin and SUKU go up and down completely randomly.

Pair Corralation between Bitcoin and SUKU

Assuming the 90 days trading horizon Bitcoin is expected to generate 0.65 times more return on investment than SUKU. However, Bitcoin is 1.53 times less risky than SUKU. It trades about 0.26 of its potential returns per unit of risk. SUKU is currently generating about 0.15 per unit of risk. If you would invest  5,748,184  in Bitcoin on September 1, 2024 and sell it today you would earn a total of  3,944,730  from holding Bitcoin or generate 68.63% return on investment over 90 days.

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

Bitcoin  vs.  SUKU

Bitcoin

Risk-Adjusted Performance

20 of 100

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.

SUKU

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with Bitcoin and SUKU

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

The idea behind Bitcoin and SUKU 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.