Correlation Between Ninepoint Bitcoin and IShares ESG

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Can any of the company-specific risk be diversified away by investing in both Ninepoint Bitcoin and IShares ESG 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 IShares ESG 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 iShares ESG Advanced, you can compare the effects of market volatilities on Ninepoint Bitcoin and IShares ESG 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 IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ninepoint Bitcoin and IShares ESG.

Diversification Opportunities for Ninepoint Bitcoin and IShares ESG

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Ninepoint and IShares is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ninepoint Bitcoin ETF and iShares ESG Advanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Advanced 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 IShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ESG Advanced has no effect on the direction of Ninepoint Bitcoin i.e., Ninepoint Bitcoin and IShares ESG go up and down completely randomly.

Pair Corralation between Ninepoint Bitcoin and IShares ESG

Assuming the 90 days trading horizon Ninepoint Bitcoin ETF is expected to generate 2.88 times more return on investment than IShares ESG. However, Ninepoint Bitcoin is 2.88 times more volatile than iShares ESG Advanced. It trades about 0.11 of its potential returns per unit of risk. iShares ESG Advanced is currently generating about 0.14 per unit of risk. If you would invest  745.00  in Ninepoint Bitcoin ETF on September 3, 2024 and sell it today you would earn a total of  1,748  from holding Ninepoint Bitcoin ETF or generate 234.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.79%
ValuesDaily Returns

Ninepoint Bitcoin ETF  vs.  iShares ESG Advanced

 Performance 
       Timeline  
Ninepoint Bitcoin ETF 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Ninepoint Bitcoin ETF are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Ninepoint Bitcoin displayed solid returns over the last few months and may actually be approaching a breakup point.
iShares ESG Advanced 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in iShares ESG Advanced are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, IShares ESG displayed solid returns over the last few months and may actually be approaching a breakup point.

Ninepoint Bitcoin and IShares ESG Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ninepoint Bitcoin and IShares ESG

The main advantage of trading using opposite Ninepoint Bitcoin and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ninepoint Bitcoin position performs unexpectedly, IShares ESG 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 IShares ESG will offset losses from the drop in IShares ESG's long position.
The idea behind Ninepoint Bitcoin ETF and iShares ESG Advanced 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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