Correlation Between First Trust and Bitwise Ethereum
Can any of the company-specific risk be diversified away by investing in both First Trust and Bitwise Ethereum 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 Ethereum 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 Ethereum ETF, you can compare the effects of market volatilities on First Trust and Bitwise Ethereum 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 Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Bitwise Ethereum.
Diversification Opportunities for First Trust and Bitwise Ethereum
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Bitwise is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding First Trust SkyBridge and Bitwise Ethereum ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Ethereum ETF 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 Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Ethereum ETF has no effect on the direction of First Trust i.e., First Trust and Bitwise Ethereum go up and down completely randomly.
Pair Corralation between First Trust and Bitwise Ethereum
Given the investment horizon of 90 days First Trust SkyBridge is expected to generate 1.05 times more return on investment than Bitwise Ethereum. However, First Trust is 1.05 times more volatile than Bitwise Ethereum ETF. It trades about 0.09 of its potential returns per unit of risk. Bitwise Ethereum ETF is currently generating about 0.02 per unit of risk. If you would invest 410.00 in First Trust SkyBridge on August 23, 2024 and sell it today you would earn a total of 1,551 from holding First Trust SkyBridge or generate 378.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 17.54% |
| Values | Daily Returns |
First Trust SkyBridge vs. Bitwise Ethereum ETF
Performance |
| Timeline |
| First Trust SkyBridge |
| Bitwise Ethereum ETF |
First Trust and Bitwise Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Bitwise Ethereum
The main advantage of trading using opposite First Trust and Bitwise Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Bitwise Ethereum 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 Ethereum will offset losses from the drop in Bitwise Ethereum'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 Ethereum vs. ProShares Bitcoin Strategy | Bitwise Ethereum vs. Bitwise 10 Crypto | Bitwise Ethereum vs. Global X Blockchain |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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