Correlation Between FTC and Bitcoin

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

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

Diversification Opportunities for FTC and Bitcoin

1.0

Correlation Coefficient

FTC  Bitcoin

No risk reduction

The 3 months correlation between FTC and Bitcoin is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding FTC and Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin and FTC 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 FTC are associated (or correlated) with Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin has no effect on the direction of FTC i.e., FTC and Bitcoin go up and down completely randomly.

Pair Corralation between FTC and Bitcoin

If you would invest  7,233,196  in Bitcoin on August 30, 2024 and sell it today you would earn a total of  2,395,833  from holding Bitcoin or generate 33.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	0.0%
Values	Daily Returns

FTC  vs.  Bitcoin

FTC

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days FTC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak fundamental indicators, FTC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bitcoin

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak fundamental indicators, Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FTC and Bitcoin

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

The idea behind FTC and Bitcoin 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.