Correlation Between MTL and Bitcoin SV

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

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

Diversification Opportunities for MTL and Bitcoin SV

0.82

Correlation Coefficient

MTL  Bitcoin SV

Very poor diversification

The 3 months correlation between MTL and Bitcoin is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding MTL and Bitcoin SV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin SV and MTL 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 MTL are associated (or correlated) with Bitcoin SV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin SV has no effect on the direction of MTL i.e., MTL and Bitcoin SV go up and down completely randomly.

Pair Corralation between MTL and Bitcoin SV

Assuming the 90 days trading horizon MTL is expected to generate 0.9 times more return on investment than Bitcoin SV. However, MTL is 1.11 times less risky than Bitcoin SV. It trades about 0.08 of its potential returns per unit of risk. Bitcoin SV is currently generating about -0.02 per unit of risk. If you would invest  148.00  in MTL on February 11, 2024 and sell it today you would earn a total of  34.00  from holding MTL or generate 22.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

MTL  vs.  Bitcoin SV

MTL

Risk-Adjusted Performance

6 of 100

Modest

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

Bitcoin SV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bitcoin SV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Bitcoin SV shareholders.

Pair Trading with MTL and Bitcoin SV

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

The idea behind MTL and Bitcoin SV 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.