Correlation Between Bitcoin and Pacer Trendpilot
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Pacer Trendpilot 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 Pacer Trendpilot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Pacer Trendpilot International, you can compare the effects of market volatilities on Bitcoin and Pacer Trendpilot 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 Pacer Trendpilot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Pacer Trendpilot.
Diversification Opportunities for Bitcoin and Pacer Trendpilot
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bitcoin and Pacer is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Pacer Trendpilot International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Trendpilot Int 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 Pacer Trendpilot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Trendpilot Int has no effect on the direction of Bitcoin i.e., Bitcoin and Pacer Trendpilot go up and down completely randomly.
Pair Corralation between Bitcoin and Pacer Trendpilot
Assuming the 90 days trading horizon Bitcoin is expected to generate 3.7 times more return on investment than Pacer Trendpilot. However, Bitcoin is 3.7 times more volatile than Pacer Trendpilot International. It trades about 0.17 of its potential returns per unit of risk. Pacer Trendpilot International is currently generating about 0.16 per unit of risk. If you would invest 9,722,339 in Bitcoin on October 21, 2024 and sell it today you would earn a total of 713,361 from holding Bitcoin or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Bitcoin vs. Pacer Trendpilot International
Performance |
| Timeline |
| Bitcoin |
| Pacer Trendpilot Int |
Bitcoin and Pacer Trendpilot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Pacer Trendpilot
The main advantage of trading using opposite Bitcoin and Pacer Trendpilot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Pacer Trendpilot 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 Pacer Trendpilot will offset losses from the drop in Pacer Trendpilot's long position.The idea behind Bitcoin and Pacer Trendpilot International 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.| Pacer Trendpilot vs. Pacer Trendpilot Mid | Pacer Trendpilot vs. Pacer Trendpilot European | Pacer Trendpilot vs. Pacer Trendpilot Large | Pacer Trendpilot vs. Pacer Trendpilot 100 |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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