Correlation Between Bitwise 10 and Morningstar Municipal
Can any of the company-specific risk be diversified away by investing in both Bitwise 10 and Morningstar Municipal 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 Morningstar Municipal 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 Morningstar Municipal Bond, you can compare the effects of market volatilities on Bitwise 10 and Morningstar Municipal 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 Morningstar Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise 10 and Morningstar Municipal.
Diversification Opportunities for Bitwise 10 and Morningstar Municipal
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bitwise and Morningstar is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise 10 Crypto and Morningstar Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morningstar Municipal 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 Morningstar Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morningstar Municipal has no effect on the direction of Bitwise 10 i.e., Bitwise 10 and Morningstar Municipal go up and down completely randomly.
Pair Corralation between Bitwise 10 and Morningstar Municipal
Given the investment horizon of 90 days Bitwise 10 Crypto is expected to generate 25.51 times more return on investment than Morningstar Municipal. However, Bitwise 10 is 25.51 times more volatile than Morningstar Municipal Bond. It trades about 0.12 of its potential returns per unit of risk. Morningstar Municipal Bond is currently generating about 0.12 per unit of risk. If you would invest 2,235 in Bitwise 10 Crypto on August 26, 2024 and sell it today you would earn a total of 3,654 from holding Bitwise 10 Crypto or generate 163.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitwise 10 Crypto vs. Morningstar Municipal Bond
Performance |
| Timeline |
| Bitwise 10 Crypto |
| Morningstar Municipal |
Bitwise 10 and Morningstar Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitwise 10 and Morningstar Municipal
The main advantage of trading using opposite Bitwise 10 and Morningstar Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitwise 10 position performs unexpectedly, Morningstar Municipal 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 Morningstar Municipal will offset losses from the drop in Morningstar Municipal'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 |
| Morningstar Municipal vs. Oppenheimer Gold Special | Morningstar Municipal vs. Precious Metals And | Morningstar Municipal vs. Europac Gold Fund | Morningstar Municipal vs. Invesco Gold Special |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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