Correlation Between NEM and Bitcoin SV
Can any of the company-specific risk be diversified away by investing in both NEM and Bitcoin SV 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 NEM and Bitcoin SV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEM and Bitcoin SV, you can compare the effects of market volatilities on NEM and Bitcoin SV 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 NEM with a short position of Bitcoin SV. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEM and Bitcoin SV.
Diversification Opportunities for NEM and Bitcoin SV
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NEM and Bitcoin is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding NEM and Bitcoin SV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin SV and NEM 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 NEM are associated (or correlated) with Bitcoin SV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin SV has no effect on the direction of NEM i.e., NEM and Bitcoin SV go up and down completely randomly.
Pair Corralation between NEM and Bitcoin SV
Assuming the 90 days trading horizon NEM is expected to generate 1.51 times less return on investment than Bitcoin SV. But when comparing it to its historical volatility, NEM is 1.04 times less risky than Bitcoin SV. It trades about 0.0 of its potential returns per unit of risk. Bitcoin SV is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7,384 in Bitcoin SV on January 18, 2024 and sell it today you would lose (823.00) from holding Bitcoin SV or give up 11.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEM vs. Bitcoin SV
Performance |
| Timeline |
| NEM |
| Bitcoin SV |
NEM and Bitcoin SV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEM and Bitcoin SV
The main advantage of trading using opposite NEM and Bitcoin SV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEM position performs unexpectedly, Bitcoin SV 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 SV will offset losses from the drop in Bitcoin SV's long position.The idea behind NEM and Bitcoin SV 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.| Bitcoin SV vs. Bitcoin Gold | Bitcoin SV vs. Bitcoin Cash | Bitcoin SV vs. Staked Ether | Bitcoin SV vs. XCAD Network |
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 Positions Ratings module to 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.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| 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 | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |