Correlation Between Enjin Coin and BCD
Can any of the company-specific risk be diversified away by investing in both Enjin Coin and BCD 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 Enjin Coin and BCD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enjin Coin and BCD, you can compare the effects of market volatilities on Enjin Coin and BCD 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 Enjin Coin with a short position of BCD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enjin Coin and BCD.
Diversification Opportunities for Enjin Coin and BCD
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enjin and BCD is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Enjin Coin and BCD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCD and Enjin Coin 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 Enjin Coin are associated (or correlated) with BCD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCD has no effect on the direction of Enjin Coin i.e., Enjin Coin and BCD go up and down completely randomly.
Pair Corralation between Enjin Coin and BCD
Assuming the 90 days trading horizon Enjin Coin is expected to generate 2.12 times less return on investment than BCD. But when comparing it to its historical volatility, Enjin Coin is 1.57 times less risky than BCD. It trades about 0.02 of its potential returns per unit of risk. BCD is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8.90 in BCD on February 12, 2024 and sell it today you would lose (0.63) from holding BCD or give up 7.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enjin Coin vs. BCD
Performance |
| Timeline |
| Enjin Coin |
| BCD |
Enjin Coin and BCD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enjin Coin and BCD
The main advantage of trading using opposite Enjin Coin and BCD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enjin Coin position performs unexpectedly, BCD 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 BCD will offset losses from the drop in BCD's long position.The idea behind Enjin Coin and BCD 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |