Correlation Between First Trust and Valkyrie Bitcoin
Can any of the company-specific risk be diversified away by investing in both First Trust and Valkyrie Bitcoin 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 Valkyrie Bitcoin 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 Valkyrie Bitcoin Strategy, you can compare the effects of market volatilities on First Trust and Valkyrie Bitcoin 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 Valkyrie Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Valkyrie Bitcoin.
Diversification Opportunities for First Trust and Valkyrie Bitcoin
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and Valkyrie is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding First Trust SkyBridge and Valkyrie Bitcoin Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valkyrie Bitcoin Strategy 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 Valkyrie Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valkyrie Bitcoin Strategy has no effect on the direction of First Trust i.e., First Trust and Valkyrie Bitcoin go up and down completely randomly.
Pair Corralation between First Trust and Valkyrie Bitcoin
Given the investment horizon of 90 days First Trust SkyBridge is expected to generate 1.59 times more return on investment than Valkyrie Bitcoin. However, First Trust is 1.59 times more volatile than Valkyrie Bitcoin Strategy. It trades about 0.24 of its potential returns per unit of risk. Valkyrie Bitcoin Strategy is currently generating about 0.38 per unit of risk. If you would invest 1,454 in First Trust SkyBridge on August 26, 2024 and sell it today you would earn a total of 536.00 from holding First Trust SkyBridge or generate 36.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust SkyBridge vs. Valkyrie Bitcoin Strategy
Performance |
| Timeline |
| First Trust SkyBridge |
| Valkyrie Bitcoin Strategy |
First Trust and Valkyrie Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Valkyrie Bitcoin
The main advantage of trading using opposite First Trust and Valkyrie Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Valkyrie Bitcoin 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 Valkyrie Bitcoin will offset losses from the drop in Valkyrie Bitcoin'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 |
| Valkyrie Bitcoin vs. Grayscale Bitcoin Trust | Valkyrie Bitcoin vs. Siren Nasdaq NexGen | Valkyrie Bitcoin vs. Grayscale Bitcoin Mini | Valkyrie Bitcoin vs. First Trust SkyBridge |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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