Correlation Between Ginkgo Bioworks and Bitcoin

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

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

Diversification Opportunities for Ginkgo Bioworks and Bitcoin

-0.41

Correlation Coefficient

Ginkgo Bioworks  Bitcoin

Very good diversification

The 3 months correlation between Ginkgo and Bitcoin is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ginkgo Bioworks Holdings and Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin and Ginkgo Bioworks 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 Ginkgo Bioworks Holdings 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 Ginkgo Bioworks i.e., Ginkgo Bioworks and Bitcoin go up and down completely randomly.

Pair Corralation between Ginkgo Bioworks and Bitcoin

Considering the 90-day investment horizon Ginkgo Bioworks Holdings is expected to under-perform the Bitcoin. In addition to that, Ginkgo Bioworks is 1.76 times more volatile than Bitcoin. It trades about -0.05 of its total potential returns per unit of risk. Bitcoin is currently generating about 0.16 per unit of volatility. If you would invest  3,392,352  in Bitcoin on January 19, 2024 and sell it today you would earn a total of  2,757,038  from holding Bitcoin or generate 81.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.09%
Values	Daily Returns

Ginkgo Bioworks Holdings  vs.  Bitcoin

Ginkgo Bioworks Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ginkgo Bioworks Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Bitcoin

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 14 (%) 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.

Pair Trading with Ginkgo Bioworks and Bitcoin

The main advantage of trading using opposite Ginkgo Bioworks and Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ginkgo Bioworks 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 Ginkgo Bioworks Holdings 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.

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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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.