Correlation Between Bitwise Crypto and XBTF
Can any of the company-specific risk be diversified away by investing in both Bitwise Crypto and XBTF 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 XBTF 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 XBTF, you can compare the effects of market volatilities on Bitwise Crypto and XBTF 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 XBTF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise Crypto and XBTF.
Diversification Opportunities for Bitwise Crypto and XBTF
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bitwise and XBTF is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise Crypto Industry and XBTF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XBTF 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 XBTF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XBTF has no effect on the direction of Bitwise Crypto i.e., Bitwise Crypto and XBTF go up and down completely randomly.
Pair Corralation between Bitwise Crypto and XBTF
Given the investment horizon of 90 days Bitwise Crypto Industry is expected to generate 1.21 times more return on investment than XBTF. However, Bitwise Crypto is 1.21 times more volatile than XBTF. It trades about 0.11 of its potential returns per unit of risk. XBTF is currently generating about 0.12 per unit of risk. If you would invest 322.00 in Bitwise Crypto Industry on September 14, 2024 and sell it today you would earn a total of 1,740 from holding Bitwise Crypto Industry or generate 540.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 29.09% |
| Values | Daily Returns |
Bitwise Crypto Industry vs. XBTF
Performance |
| Timeline |
| Bitwise Crypto Industry |
| XBTF |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bitwise Crypto and XBTF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitwise Crypto and XBTF
The main advantage of trading using opposite Bitwise Crypto and XBTF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitwise Crypto position performs unexpectedly, XBTF 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 XBTF will offset losses from the drop in XBTF's long position.| Bitwise Crypto vs. Grayscale Bitcoin Trust | Bitwise Crypto vs. Siren Nasdaq NexGen | Bitwise Crypto vs. Grayscale Bitcoin Mini | Bitwise Crypto vs. VanEck Digital Transformation |
| XBTF vs. Grayscale Bitcoin Trust | XBTF vs. Siren Nasdaq NexGen | XBTF vs. Bitwise Crypto Industry | XBTF vs. Grayscale Bitcoin Mini |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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