Correlation Between Ninepoint Bitcoin and Invesco SP
Can any of the company-specific risk be diversified away by investing in both Ninepoint Bitcoin and Invesco SP 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 Ninepoint Bitcoin and Invesco SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ninepoint Bitcoin ETF and Invesco SP 500, you can compare the effects of market volatilities on Ninepoint Bitcoin and Invesco SP 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 Ninepoint Bitcoin with a short position of Invesco SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ninepoint Bitcoin and Invesco SP.
Diversification Opportunities for Ninepoint Bitcoin and Invesco SP
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ninepoint and Invesco is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ninepoint Bitcoin ETF and Invesco SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP 500 and Ninepoint 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 Ninepoint Bitcoin ETF are associated (or correlated) with Invesco SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco SP 500 has no effect on the direction of Ninepoint Bitcoin i.e., Ninepoint Bitcoin and Invesco SP go up and down completely randomly.
Pair Corralation between Ninepoint Bitcoin and Invesco SP
Assuming the 90 days trading horizon Ninepoint Bitcoin ETF is expected to generate 2.73 times more return on investment than Invesco SP. However, Ninepoint Bitcoin is 2.73 times more volatile than Invesco SP 500. It trades about 0.11 of its potential returns per unit of risk. Invesco SP 500 is currently generating about 0.1 per unit of risk. If you would invest 694.00 in Ninepoint Bitcoin ETF on September 2, 2024 and sell it today you would earn a total of 1,799 from holding Ninepoint Bitcoin ETF or generate 259.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ninepoint Bitcoin ETF vs. Invesco SP 500
Performance |
| Timeline |
| Ninepoint Bitcoin ETF |
| Invesco SP 500 |
Ninepoint Bitcoin and Invesco SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ninepoint Bitcoin and Invesco SP
The main advantage of trading using opposite Ninepoint Bitcoin and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ninepoint Bitcoin position performs unexpectedly, Invesco SP 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 Invesco SP will offset losses from the drop in Invesco SP's long position.| Ninepoint Bitcoin vs. Ninepoint Bitcoin ETF | Ninepoint Bitcoin vs. Ninepoint Energy | Ninepoint Bitcoin vs. Ninepoint Web3 Innovators | Ninepoint Bitcoin vs. Ninepoint Energy Income |
| Invesco SP vs. BMO SP 500 | Invesco SP vs. Vanguard SP 500 | Invesco SP vs. BMO SP 500 | Invesco SP vs. BMO NASDAQ 100 |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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