Correlation Between Global X and Bitwise Funds
Can any of the company-specific risk be diversified away by investing in both Global X and Bitwise 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 Global X and Bitwise Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Blockchain and Bitwise Funds Trust, you can compare the effects of market volatilities on Global X and Bitwise 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 Global X with a short position of Bitwise Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Bitwise Funds.
Diversification Opportunities for Global X and Bitwise Funds
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Bitwise is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Global X Blockchain and Bitwise Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Funds Trust and Global X 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 Global X Blockchain are associated (or correlated) with Bitwise Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Funds Trust has no effect on the direction of Global X i.e., Global X and Bitwise Funds go up and down completely randomly.
Pair Corralation between Global X and Bitwise Funds
Given the investment horizon of 90 days Global X Blockchain is expected to generate 1.41 times more return on investment than Bitwise Funds. However, Global X is 1.41 times more volatile than Bitwise Funds Trust. It trades about 0.08 of its potential returns per unit of risk. Bitwise Funds Trust is currently generating about 0.11 per unit of risk. If you would invest 3,357 in Global X Blockchain on August 27, 2024 and sell it today you would earn a total of 3,557 from holding Global X Blockchain or generate 105.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Blockchain vs. Bitwise Funds Trust
Performance |
| Timeline |
| Global X Blockchain |
| Bitwise Funds Trust |
Global X and Bitwise Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Bitwise Funds
The main advantage of trading using opposite Global X and Bitwise Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Bitwise 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 Bitwise Funds will offset losses from the drop in Bitwise Funds' long position.| Global X vs. VanEck Digital Transformation | Global X vs. Bitwise Crypto Industry | Global X vs. First Trust Indxx | Global X vs. First Trust SkyBridge |
| Bitwise Funds vs. Tidal Commodities Trust | Bitwise Funds vs. Bitwise Crypto Industry | Bitwise Funds vs. USCF Sustainable Battery | Bitwise Funds vs. Osprey Bitcoin Trust |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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