Correlation Between Ishares Municipal and Bitcoin Strategy
Can any of the company-specific risk be diversified away by investing in both Ishares Municipal and Bitcoin Strategy 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 Ishares Municipal and Bitcoin Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ishares Municipal Bond and Bitcoin Strategy Profund, you can compare the effects of market volatilities on Ishares Municipal and Bitcoin Strategy 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 Ishares Municipal with a short position of Bitcoin Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Municipal and Bitcoin Strategy.
Diversification Opportunities for Ishares Municipal and Bitcoin Strategy
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ishares and Bitcoin is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Municipal Bond and Bitcoin Strategy Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Strategy Profund and Ishares Municipal 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 Ishares Municipal Bond are associated (or correlated) with Bitcoin Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Strategy Profund has no effect on the direction of Ishares Municipal i.e., Ishares Municipal and Bitcoin Strategy go up and down completely randomly.
Pair Corralation between Ishares Municipal and Bitcoin Strategy
Assuming the 90 days horizon Ishares Municipal Bond is expected to generate 0.08 times more return on investment than Bitcoin Strategy. However, Ishares Municipal Bond is 12.84 times less risky than Bitcoin Strategy. It trades about -0.28 of its potential returns per unit of risk. Bitcoin Strategy Profund is currently generating about -0.14 per unit of risk. If you would invest 1,107 in Ishares Municipal Bond on October 14, 2024 and sell it today you would lose (16.00) from holding Ishares Municipal Bond or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ishares Municipal Bond vs. Bitcoin Strategy Profund
Performance |
| Timeline |
| Ishares Municipal Bond |
| Bitcoin Strategy Profund |
Ishares Municipal and Bitcoin Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ishares Municipal and Bitcoin Strategy
The main advantage of trading using opposite Ishares Municipal and Bitcoin Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ishares Municipal position performs unexpectedly, Bitcoin Strategy 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 Strategy will offset losses from the drop in Bitcoin Strategy's long position.| Ishares Municipal vs. Lebenthal Lisanti Small | Ishares Municipal vs. Df Dent Small | Ishares Municipal vs. Rbc Small Cap | Ishares Municipal vs. Franklin Small Cap |
| Bitcoin Strategy vs. Aig Government Money | Bitcoin Strategy vs. Alpine Ultra Short | Bitcoin Strategy vs. Ishares Municipal Bond | Bitcoin Strategy vs. Morningstar Municipal Bond |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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