Correlation Between BTM and LEO Token
Can any of the company-specific risk be diversified away by investing in both BTM and LEO Token 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 BTM and LEO Token into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTM and LEO Token, you can compare the effects of market volatilities on BTM and LEO Token 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 BTM with a short position of LEO Token. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTM and LEO Token.
Diversification Opportunities for BTM and LEO Token
Very good diversification
The 12 months correlation between BTM and LEO is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding BTM and LEO Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEO Token and BTM 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 BTM are associated (or correlated) with LEO Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEO Token has no effect on the direction of BTM i.e., BTM and LEO Token go up and down completely randomly.
Pair Corralation between BTM and LEO Token
Assuming the 90 days trading horizon BTM is expected to under-perform the LEO Token. In addition to that, BTM is 2.19 times more volatile than LEO Token. It trades about -0.14 of its total potential returns per unit of risk. LEO Token is currently generating about -0.11 per unit of volatility. If you would invest 609.00 in LEO Token on January 24, 2024 and sell it today you would lose (31.00) from holding LEO Token or give up 5.09% of portfolio value over 90 days.
| Time Period | 12 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTM vs. LEO Token
Performance |
| Timeline |
| BTM |
| LEO Token |
BTM and LEO Token Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTM and LEO Token
The main advantage of trading using opposite BTM and LEO Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTM position performs unexpectedly, LEO Token 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 LEO Token will offset losses from the drop in LEO Token's long position.The idea behind BTM and LEO Token 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.Check out your portfolio center.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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |