Correlation Between Bitcoin and Maj Invest

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

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

Diversification Opportunities for Bitcoin and Maj Invest

0.76

Correlation Coefficient

Bitcoin  Maj Invest

Poor diversification

The 3 months correlation between Bitcoin and Maj is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Maj Invest Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest Danske and Bitcoin 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 are associated (or correlated) with Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest Danske has no effect on the direction of Bitcoin i.e., Bitcoin and Maj Invest go up and down completely randomly.

Pair Corralation between Bitcoin and Maj Invest

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the Maj Invest. In addition to that, Bitcoin is 2.98 times more volatile than Maj Invest Danske. It trades about -0.07 of its total potential returns per unit of risk. Maj Invest Danske is currently generating about 0.17 per unit of volatility. If you would invest  18,550  in Maj Invest Danske on February 14, 2024 and sell it today you would earn a total of  580.00  from holding Maj Invest Danske or generate 3.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	90.48%
Values	Daily Returns

Bitcoin  vs.  Maj Invest Danske

Bitcoin

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Maj Invest Danske

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maj Invest Danske are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking signals, Maj Invest may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Bitcoin and Maj Invest

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

The idea behind Bitcoin and Maj Invest Danske 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.