Correlation Between Open Network and Wrapped Bitcoin
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By analyzing existing cross correlation between The Open Network and Wrapped Bitcoin, you can compare the effects of market volatilities on Open Network and Wrapped Bitcoin 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 Open Network with a short position of Wrapped Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Open Network and Wrapped Bitcoin.
Diversification Opportunities for Open Network and Wrapped Bitcoin
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Open and Wrapped is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding The Open Network and Wrapped Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wrapped Bitcoin and Open Network 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 The Open Network are associated (or correlated) with Wrapped Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wrapped Bitcoin has no effect on the direction of Open Network i.e., Open Network and Wrapped Bitcoin go up and down completely randomly.
Pair Corralation between Open Network and Wrapped Bitcoin
Assuming the 90 days trading horizon Open Network is expected to generate 8.93 times less return on investment than Wrapped Bitcoin. In addition to that, Open Network is 1.86 times more volatile than Wrapped Bitcoin. It trades about 0.02 of its total potential returns per unit of risk. Wrapped Bitcoin is currently generating about 0.26 per unit of volatility. If you would invest 6,078,061 in Wrapped Bitcoin on March 11, 2024 and sell it today you would earn a total of 853,882 from holding Wrapped Bitcoin or generate 14.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
The Open Network vs. Wrapped Bitcoin
Performance |
Timeline |
Open Network |
Wrapped Bitcoin |
Open Network and Wrapped Bitcoin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Open Network and Wrapped Bitcoin
The main advantage of trading using opposite Open Network and Wrapped Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Open Network position performs unexpectedly, Wrapped Bitcoin 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 Wrapped Bitcoin will offset losses from the drop in Wrapped Bitcoin's long position.The idea behind The Open Network and Wrapped Bitcoin 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.Wrapped Bitcoin vs. Solana | Wrapped Bitcoin vs. XRP | Wrapped Bitcoin vs. The Open Network | Wrapped Bitcoin vs. Staked Ether |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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