Correlation Between First Trust and Bitwise Crypto
Can any of the company-specific risk be diversified away by investing in both First Trust and Bitwise Crypto 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 First Trust and Bitwise Crypto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust SkyBridge and Bitwise Crypto Industry, you can compare the effects of market volatilities on First Trust and Bitwise Crypto 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 First Trust with a short position of Bitwise Crypto. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Bitwise Crypto.
Diversification Opportunities for First Trust and Bitwise Crypto
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Bitwise is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding First Trust SkyBridge and Bitwise Crypto Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Crypto Industry and First Trust 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 First Trust SkyBridge are associated (or correlated) with Bitwise Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Crypto Industry has no effect on the direction of First Trust i.e., First Trust and Bitwise Crypto go up and down completely randomly.
Pair Corralation between First Trust and Bitwise Crypto
Given the investment horizon of 90 days First Trust SkyBridge is expected to under-perform the Bitwise Crypto. But the etf apears to be less risky and, when comparing its historical volatility, First Trust SkyBridge is 1.08 times less risky than Bitwise Crypto. The etf trades about -0.15 of its potential returns per unit of risk. The Bitwise Crypto Industry is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 1,964 in Bitwise Crypto Industry on November 18, 2024 and sell it today you would lose (125.00) from holding Bitwise Crypto Industry or give up 6.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust SkyBridge vs. Bitwise Crypto Industry
Performance |
| Timeline |
| First Trust SkyBridge |
| Bitwise Crypto Industry |
First Trust and Bitwise Crypto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Bitwise Crypto
The main advantage of trading using opposite First Trust and Bitwise Crypto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Bitwise Crypto 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 Bitwise Crypto will offset losses from the drop in Bitwise Crypto's long position.| First Trust vs. VanEck Digital Transformation | First Trust vs. Bitwise Crypto Industry | First Trust vs. Global X Blockchain | First Trust vs. First Trust Indxx |
| Bitwise Crypto vs. Bitwise 10 Crypto | Bitwise Crypto vs. VanEck Digital Transformation | Bitwise Crypto vs. Global X Blockchain | Bitwise Crypto vs. First Trust Indxx |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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