Correlation Between Enjin Coin and Bitcoin
Can any of the company-specific risk be diversified away by investing in both Enjin Coin and Bitcoin 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 Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enjin Coin and Bitcoin, you can compare the effects of market volatilities on Enjin Coin and 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 Enjin Coin with a short position of Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enjin Coin and Bitcoin.
Diversification Opportunities for Enjin Coin and Bitcoin
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enjin and Bitcoin is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Enjin Coin and Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin 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 Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin has no effect on the direction of Enjin Coin i.e., Enjin Coin and Bitcoin go up and down completely randomly.
Pair Corralation between Enjin Coin and Bitcoin
Assuming the 90 days trading horizon Enjin Coin is expected to generate 4.46 times less return on investment than Bitcoin. In addition to that, Enjin Coin is 1.73 times more volatile than Bitcoin. It trades about 0.02 of its total potential returns per unit of risk. Bitcoin is currently generating about 0.13 per unit of volatility. If you would invest 2,869,485 in Bitcoin on January 26, 2024 and sell it today you would earn a total of 3,762,252 from holding Bitcoin or generate 131.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enjin Coin vs. Bitcoin
Performance |
| Timeline |
| Enjin Coin |
| Bitcoin |
Enjin Coin and Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enjin Coin and Bitcoin
The main advantage of trading using opposite Enjin Coin and Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enjin Coin position performs unexpectedly, 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 Bitcoin will offset losses from the drop in Bitcoin's long position.The idea behind Enjin Coin and 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.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |