Correlation Between Bitwise Funds and Roundhill Magnificent
Can any of the company-specific risk be diversified away by investing in both Bitwise Funds and Roundhill Magnificent 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 Bitwise Funds and Roundhill Magnificent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitwise Funds Trust and Roundhill Magnificent Seven, you can compare the effects of market volatilities on Bitwise Funds and Roundhill Magnificent 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 Bitwise Funds with a short position of Roundhill Magnificent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise Funds and Roundhill Magnificent.
Diversification Opportunities for Bitwise Funds and Roundhill Magnificent
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bitwise and Roundhill is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise Funds Trust and Roundhill Magnificent Seven in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roundhill Magnificent and Bitwise Funds 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 Bitwise Funds Trust are associated (or correlated) with Roundhill Magnificent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roundhill Magnificent has no effect on the direction of Bitwise Funds i.e., Bitwise Funds and Roundhill Magnificent go up and down completely randomly.
Pair Corralation between Bitwise Funds and Roundhill Magnificent
Given the investment horizon of 90 days Bitwise Funds Trust is expected to generate 1.66 times more return on investment than Roundhill Magnificent. However, Bitwise Funds is 1.66 times more volatile than Roundhill Magnificent Seven. It trades about 0.3 of its potential returns per unit of risk. Roundhill Magnificent Seven is currently generating about 0.12 per unit of risk. If you would invest 4,984 in Bitwise Funds Trust on August 28, 2024 and sell it today you would earn a total of 901.00 from holding Bitwise Funds Trust or generate 18.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitwise Funds Trust vs. Roundhill Magnificent Seven
Performance |
| Timeline |
| Bitwise Funds Trust |
| Roundhill Magnificent |
Bitwise Funds and Roundhill Magnificent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitwise Funds and Roundhill Magnificent
The main advantage of trading using opposite Bitwise Funds and Roundhill Magnificent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitwise Funds position performs unexpectedly, Roundhill Magnificent 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 Roundhill Magnificent will offset losses from the drop in Roundhill Magnificent's long position.| Bitwise Funds vs. Invesco DWA Utilities | Bitwise Funds vs. Invesco Dynamic Large | Bitwise Funds vs. Invesco Dynamic Large | Bitwise Funds vs. HUMANA INC |
| Roundhill Magnificent vs. FT Cboe Vest | Roundhill Magnificent vs. Bitwise Funds Trust | Roundhill Magnificent vs. FT Vest Equity | Roundhill Magnificent vs. Zillow Group Class |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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