Correlation Between Bitcoin Cash and Ultra Fund

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

By analyzing existing cross correlation between Bitcoin Cash and Ultra Fund Y, you can compare the effects of market volatilities on Bitcoin Cash and Ultra Fund 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 Bitcoin Cash with a short position of Ultra Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Cash and Ultra Fund.

Diversification Opportunities for Bitcoin Cash and Ultra Fund

0.7

Correlation Coefficient

Bitcoin Cash  Ultra Fund

Poor diversification

The 3 months correlation between Bitcoin and Ultra is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Cash and Ultra Fund Y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Fund Y and Bitcoin Cash 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 Bitcoin Cash are associated (or correlated) with Ultra Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Fund Y has no effect on the direction of Bitcoin Cash i.e., Bitcoin Cash and Ultra Fund go up and down completely randomly.

Pair Corralation between Bitcoin Cash and Ultra Fund

Assuming the 90 days trading horizon Bitcoin Cash is expected to generate 6.85 times more return on investment than Ultra Fund. However, Bitcoin Cash is 6.85 times more volatile than Ultra Fund Y. It trades about 0.08 of its potential returns per unit of risk. Ultra Fund Y is currently generating about -0.27 per unit of risk. If you would invest  47,908  in Bitcoin Cash on January 24, 2024 and sell it today you would earn a total of  3,193  from holding Bitcoin Cash or generate 6.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Bitcoin Cash  vs.  Ultra Fund Y

Bitcoin Cash

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Cash are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Bitcoin Cash exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ultra Fund Y

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ultra Fund Y are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ultra Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bitcoin Cash and Ultra Fund

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

The idea behind Bitcoin Cash and Ultra Fund Y 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.