Correlation Between Bitwise Crypto and SPDR Galaxy
Can any of the company-specific risk be diversified away by investing in both Bitwise Crypto and SPDR Galaxy 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 Bitwise Crypto and SPDR Galaxy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitwise Crypto Industry and SPDR Galaxy Digital, you can compare the effects of market volatilities on Bitwise Crypto and SPDR Galaxy 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 Bitwise Crypto with a short position of SPDR Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise Crypto and SPDR Galaxy.
Diversification Opportunities for Bitwise Crypto and SPDR Galaxy
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Bitwise and SPDR is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise Crypto Industry and SPDR Galaxy Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Galaxy Digital and Bitwise Crypto 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 Bitwise Crypto Industry are associated (or correlated) with SPDR Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Galaxy Digital has no effect on the direction of Bitwise Crypto i.e., Bitwise Crypto and SPDR Galaxy go up and down completely randomly.
Pair Corralation between Bitwise Crypto and SPDR Galaxy
Given the investment horizon of 90 days Bitwise Crypto Industry is expected to generate 1.38 times more return on investment than SPDR Galaxy. However, Bitwise Crypto is 1.38 times more volatile than SPDR Galaxy Digital. It trades about 0.02 of its potential returns per unit of risk. SPDR Galaxy Digital is currently generating about -0.03 per unit of risk. If you would invest 2,090 in Bitwise Crypto Industry on September 13, 2024 and sell it today you would lose (12.00) from holding Bitwise Crypto Industry or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bitwise Crypto Industry vs. SPDR Galaxy Digital
Performance |
| Timeline |
| Bitwise Crypto Industry |
| SPDR Galaxy Digital |
Bitwise Crypto and SPDR Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitwise Crypto and SPDR Galaxy
The main advantage of trading using opposite Bitwise Crypto and SPDR Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitwise Crypto position performs unexpectedly, SPDR Galaxy 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 SPDR Galaxy will offset losses from the drop in SPDR Galaxy's long position.| Bitwise Crypto vs. Bitwise 10 Crypto | Bitwise Crypto vs. VanEck Digital Transformation | Bitwise Crypto vs. Global X Blockchain | Bitwise Crypto vs. First Trust Indxx |
| SPDR Galaxy vs. Grayscale Bitcoin Trust | SPDR Galaxy vs. Siren Nasdaq NexGen | SPDR Galaxy vs. First Trust Indxx | SPDR Galaxy vs. Bitwise Crypto Industry |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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