Correlation Between 3iQ Bitcoin and 3iQ CoinShares
Can any of the company-specific risk be diversified away by investing in both 3iQ Bitcoin and 3iQ CoinShares 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 3iQ Bitcoin and 3iQ CoinShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3iQ Bitcoin ETF and 3iQ CoinShares Ether, you can compare the effects of market volatilities on 3iQ Bitcoin and 3iQ CoinShares 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 3iQ Bitcoin with a short position of 3iQ CoinShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3iQ Bitcoin and 3iQ CoinShares.
Diversification Opportunities for 3iQ Bitcoin and 3iQ CoinShares
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 3iQ and 3iQ is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding 3iQ Bitcoin ETF and 3iQ CoinShares Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3iQ CoinShares Ether and 3iQ 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 3iQ Bitcoin ETF are associated (or correlated) with 3iQ CoinShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3iQ CoinShares Ether has no effect on the direction of 3iQ Bitcoin i.e., 3iQ Bitcoin and 3iQ CoinShares go up and down completely randomly.
Pair Corralation between 3iQ Bitcoin and 3iQ CoinShares
Assuming the 90 days trading horizon 3iQ Bitcoin is expected to generate 1.07 times less return on investment than 3iQ CoinShares. But when comparing it to its historical volatility, 3iQ Bitcoin ETF is 1.25 times less risky than 3iQ CoinShares. It trades about 0.32 of its potential returns per unit of risk. 3iQ CoinShares Ether is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,368 in 3iQ CoinShares Ether on August 29, 2024 and sell it today you would earn a total of 458.00 from holding 3iQ CoinShares Ether or generate 33.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
3iQ Bitcoin ETF vs. 3iQ CoinShares Ether
Performance |
| Timeline |
| 3iQ Bitcoin ETF |
| 3iQ CoinShares Ether |
3iQ Bitcoin and 3iQ CoinShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3iQ Bitcoin and 3iQ CoinShares
The main advantage of trading using opposite 3iQ Bitcoin and 3iQ CoinShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3iQ Bitcoin position performs unexpectedly, 3iQ CoinShares 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 3iQ CoinShares will offset losses from the drop in 3iQ CoinShares' long position.| 3iQ Bitcoin vs. 3iQ CoinShares Ether | 3iQ Bitcoin vs. NBI High Yield | 3iQ Bitcoin vs. NBI Unconstrained Fixed | 3iQ Bitcoin vs. Mackenzie Developed ex North |
| 3iQ CoinShares vs. 3iQ Bitcoin ETF | 3iQ CoinShares vs. NBI High Yield | 3iQ CoinShares vs. NBI Unconstrained Fixed | 3iQ CoinShares vs. Mackenzie Developed ex North |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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