Correlation Between Chainlink and Bitkub Coin

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

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

Diversification Opportunities for Chainlink and Bitkub Coin

0.68

Correlation Coefficient

Chainlink  Bitkub Coin

Poor diversification

The 3 months correlation between Chainlink and Bitkub is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Chainlink and Bitkub Coin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitkub Coin and Chainlink 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 Chainlink are associated (or correlated) with Bitkub Coin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitkub Coin has no effect on the direction of Chainlink i.e., Chainlink and Bitkub Coin go up and down completely randomly.

Pair Corralation between Chainlink and Bitkub Coin

Assuming the 90 days trading horizon Chainlink is expected to generate 1.0 times less return on investment than Bitkub Coin. In addition to that, Chainlink is 1.09 times more volatile than Bitkub Coin. It trades about 0.23 of its total potential returns per unit of risk. Bitkub Coin is currently generating about 0.25 per unit of volatility. If you would invest  137.00  in Bitkub Coin on September 1, 2024 and sell it today you would earn a total of  119.00  from holding Bitkub Coin or generate 86.86% return on investment over 90 days.

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

Chainlink  vs.  Bitkub Coin

Chainlink

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chainlink are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Chainlink exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bitkub Coin

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitkub Coin are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, Bitkub Coin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chainlink and Bitkub Coin

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

The idea behind Chainlink and Bitkub Coin 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.