Correlation Between BTM and MX Token
Can any of the company-specific risk be diversified away by investing in both BTM and MX 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 MX Token into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTM and MX Token, you can compare the effects of market volatilities on BTM and MX 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 MX Token. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTM and MX Token.
Diversification Opportunities for BTM and MX Token
Weak diversification
The 3 months correlation between BTM and MX Token is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding BTM and MX Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MX 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 MX Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MX Token has no effect on the direction of BTM i.e., BTM and MX Token go up and down completely randomly.
Pair Corralation between BTM and MX Token
Assuming the 90 days trading horizon BTM is expected to generate 6.15 times less return on investment than MX Token. In addition to that, BTM is 1.3 times more volatile than MX Token. It trades about 0.04 of its total potential returns per unit of risk. MX Token is currently generating about 0.33 per unit of volatility. If you would invest 286.00 in MX Token on January 20, 2024 and sell it today you would earn a total of 254.00 from holding MX Token or generate 88.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTM vs. MX Token
Performance |
| Timeline |
| BTM |
| MX Token |
BTM and MX Token Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTM and MX Token
The main advantage of trading using opposite BTM and MX Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTM position performs unexpectedly, MX 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 MX Token will offset losses from the drop in MX Token's long position.The idea behind BTM and MX 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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