Correlation Between Bitcoin and 1290 Smartbeta
Can any of the company-specific risk be diversified away by investing in both Bitcoin and 1290 Smartbeta 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 1290 Smartbeta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and 1290 Smartbeta Equity, you can compare the effects of market volatilities on Bitcoin and 1290 Smartbeta 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 1290 Smartbeta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and 1290 Smartbeta.
Diversification Opportunities for Bitcoin and 1290 Smartbeta
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bitcoin and 1290 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and 1290 Smartbeta Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1290 Smartbeta Equity 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 1290 Smartbeta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1290 Smartbeta Equity has no effect on the direction of Bitcoin i.e., Bitcoin and 1290 Smartbeta go up and down completely randomly.
Pair Corralation between Bitcoin and 1290 Smartbeta
Assuming the 90 days trading horizon Bitcoin is expected to generate 3.31 times more return on investment than 1290 Smartbeta. However, Bitcoin is 3.31 times more volatile than 1290 Smartbeta Equity. It trades about 0.17 of its potential returns per unit of risk. 1290 Smartbeta Equity is currently generating about 0.28 per unit of risk. If you would invest 9,813,580 in Bitcoin on November 2, 2024 and sell it today you would earn a total of 671,920 from holding Bitcoin or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bitcoin vs. 1290 Smartbeta Equity
Performance |
| Timeline |
| Bitcoin |
| 1290 Smartbeta Equity |
Bitcoin and 1290 Smartbeta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and 1290 Smartbeta
The main advantage of trading using opposite Bitcoin and 1290 Smartbeta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, 1290 Smartbeta 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 1290 Smartbeta will offset losses from the drop in 1290 Smartbeta's long position.The idea behind Bitcoin and 1290 Smartbeta Equity 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.| 1290 Smartbeta vs. Pimco Capital Sec | 1290 Smartbeta vs. Prudential Financial Services | 1290 Smartbeta vs. Rmb Mendon Financial | 1290 Smartbeta vs. Angel Oak Financial |
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 Stocks Directory module to find actively traded stocks across global markets.
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