Correlation Between Bitcoin and DoubleLine Shiller
Can any of the company-specific risk be diversified away by investing in both Bitcoin and DoubleLine Shiller 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 Bitcoin and DoubleLine Shiller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and DoubleLine Shiller CAPE, you can compare the effects of market volatilities on Bitcoin and DoubleLine Shiller 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 Bitcoin with a short position of DoubleLine Shiller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and DoubleLine Shiller.
Diversification Opportunities for Bitcoin and DoubleLine Shiller
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bitcoin and DoubleLine is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and DoubleLine Shiller CAPE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleLine Shiller CAPE and Bitcoin 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 Bitcoin are associated (or correlated) with DoubleLine Shiller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoubleLine Shiller CAPE has no effect on the direction of Bitcoin i.e., Bitcoin and DoubleLine Shiller go up and down completely randomly.
Pair Corralation between Bitcoin and DoubleLine Shiller
Assuming the 90 days trading horizon Bitcoin is expected to generate 9.95 times more return on investment than DoubleLine Shiller. However, Bitcoin is 9.95 times more volatile than DoubleLine Shiller CAPE. It trades about 0.09 of its potential returns per unit of risk. DoubleLine Shiller CAPE is currently generating about 0.07 per unit of risk. If you would invest 2,220,856 in Bitcoin on November 2, 2024 and sell it today you would earn a total of 8,264,644 from holding Bitcoin or generate 372.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 60.45% |
| Values | Daily Returns |
Bitcoin vs. DoubleLine Shiller CAPE
Performance |
| Timeline |
| Bitcoin |
| DoubleLine Shiller CAPE |
Bitcoin and DoubleLine Shiller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and DoubleLine Shiller
The main advantage of trading using opposite Bitcoin and DoubleLine Shiller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, DoubleLine Shiller 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 DoubleLine Shiller will offset losses from the drop in DoubleLine Shiller's long position.The idea behind Bitcoin and DoubleLine Shiller CAPE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| DoubleLine Shiller vs. FT Vest Equity | DoubleLine Shiller vs. Zillow Group Class | DoubleLine Shiller vs. Northern Lights | DoubleLine Shiller vs. VanEck Vectors Moodys |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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