Correlation Between Bit Origin and Turning Point

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

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

Diversification Opportunities for Bit Origin and Turning Point

-0.67

Correlation Coefficient

Bit Origin  Turning Point

Excellent diversification

The 3 months correlation between Bit and Turning is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bit Origin and Turning Point Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turning Point Brands and Bit Origin 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 Bit Origin are associated (or correlated) with Turning Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turning Point Brands has no effect on the direction of Bit Origin i.e., Bit Origin and Turning Point go up and down completely randomly.

Pair Corralation between Bit Origin and Turning Point

Given the investment horizon of 90 days Bit Origin is expected to under-perform the Turning Point. In addition to that, Bit Origin is 3.16 times more volatile than Turning Point Brands. It trades about -0.03 of its total potential returns per unit of risk. Turning Point Brands is currently generating about 0.32 per unit of volatility. If you would invest  4,004  in Turning Point Brands on September 3, 2024 and sell it today you would earn a total of  2,085  from holding Turning Point Brands or generate 52.07% return on investment over 90 days.

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

Bit Origin  vs.  Turning Point Brands

Bit Origin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bit Origin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Turning Point Brands

Risk-Adjusted Performance

25 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Turning Point Brands are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Turning Point sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bit Origin and Turning Point

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

The idea behind Bit Origin and Turning Point Brands 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.