Correlation Between BGC and BTCS

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

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

Diversification Opportunities for BGC and BTCS

-0.17

Correlation Coefficient

BGC  BTCS

Good diversification

The 3 months correlation between BGC and BTCS is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding BGC Group and BTCS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTCS Inc and BGC 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 BGC Group are associated (or correlated) with BTCS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTCS Inc has no effect on the direction of BGC i.e., BGC and BTCS go up and down completely randomly.

Pair Corralation between BGC and BTCS

Considering the 90-day investment horizon BGC Group is expected to generate 0.5 times more return on investment than BTCS. However, BGC Group is 1.99 times less risky than BTCS. It trades about 0.14 of its potential returns per unit of risk. BTCS Inc is currently generating about 0.01 per unit of risk. If you would invest  694.00  in BGC Group on February 26, 2024 and sell it today you would earn a total of  172.00  from holding BGC Group or generate 24.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

BGC Group  vs.  BTCS Inc

BGC Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BGC Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, BGC exhibited solid returns over the last few months and may actually be approaching a breakup point.

BTCS Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BTCS Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, BTCS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BGC and BTCS

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

The idea behind BGC Group and BTCS Inc 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 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.