Correlation Between Bitwise 10 and First Trust
Can any of the company-specific risk be diversified away by investing in both Bitwise 10 and First Trust 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 10 and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitwise 10 Crypto and First Trust Mortgage, you can compare the effects of market volatilities on Bitwise 10 and First Trust 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 10 with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise 10 and First Trust.
Diversification Opportunities for Bitwise 10 and First Trust
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bitwise and First is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise 10 Crypto and First Trust Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Mortgage and Bitwise 10 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 10 Crypto are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Mortgage has no effect on the direction of Bitwise 10 i.e., Bitwise 10 and First Trust go up and down completely randomly.
Pair Corralation between Bitwise 10 and First Trust
Given the investment horizon of 90 days Bitwise 10 Crypto is expected to generate 8.23 times more return on investment than First Trust. However, Bitwise 10 is 8.23 times more volatile than First Trust Mortgage. It trades about 0.5 of its potential returns per unit of risk. First Trust Mortgage is currently generating about 0.0 per unit of risk. If you would invest 3,669 in Bitwise 10 Crypto on August 27, 2024 and sell it today you would earn a total of 2,220 from holding Bitwise 10 Crypto or generate 60.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitwise 10 Crypto vs. First Trust Mortgage
Performance |
| Timeline |
| Bitwise 10 Crypto |
| First Trust Mortgage |
Bitwise 10 and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitwise 10 and First Trust
The main advantage of trading using opposite Bitwise 10 and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitwise 10 position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Bitwise 10 vs. Grayscale Digital Large | Bitwise 10 vs. Grayscale Ethereum Trust | Bitwise 10 vs. Grayscale Litecoin Trust | Bitwise 10 vs. Grayscale Bitcoin Cash |
| First Trust vs. First Trust Senior | First Trust vs. Western Asset Global | First Trust vs. Western Asset Global | First Trust vs. BlackRock Floating Rate |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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