Correlation Between Bitwise Crypto and SP Funds
Can any of the company-specific risk be diversified away by investing in both Bitwise Crypto and SP Funds 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 SP Funds 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 SP Funds Dow, you can compare the effects of market volatilities on Bitwise Crypto and SP Funds 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 SP Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise Crypto and SP Funds.
Diversification Opportunities for Bitwise Crypto and SP Funds
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bitwise and SPSK is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise Crypto Industry and SP Funds Dow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Funds Dow 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 SP Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Funds Dow has no effect on the direction of Bitwise Crypto i.e., Bitwise Crypto and SP Funds go up and down completely randomly.
Pair Corralation between Bitwise Crypto and SP Funds
Given the investment horizon of 90 days Bitwise Crypto Industry is expected to generate 8.54 times more return on investment than SP Funds. However, Bitwise Crypto is 8.54 times more volatile than SP Funds Dow. It trades about 0.11 of its potential returns per unit of risk. SP Funds Dow is currently generating about 0.05 per unit of risk. If you would invest 1,246 in Bitwise Crypto Industry on August 24, 2024 and sell it today you would earn a total of 724.00 from holding Bitwise Crypto Industry or generate 58.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitwise Crypto Industry vs. SP Funds Dow
Performance |
| Timeline |
| Bitwise Crypto Industry |
| SP Funds Dow |
Bitwise Crypto and SP Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitwise Crypto and SP Funds
The main advantage of trading using opposite Bitwise Crypto and SP Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitwise Crypto position performs unexpectedly, SP Funds 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 SP Funds will offset losses from the drop in SP Funds' long position.| Bitwise Crypto vs. ProShares Bitcoin Strategy | Bitwise Crypto vs. Bitwise 10 Crypto | Bitwise Crypto vs. Global X Blockchain |
| SP Funds vs. Invesco Fundamental Investment | SP Funds vs. iShares International High | SP Funds vs. VanEck International High |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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