Correlation Between Desjardins and Bitcoin ETF
Can any of the company-specific risk be diversified away by investing in both Desjardins and Bitcoin ETF 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 Desjardins and Bitcoin ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desjardins 1 5 Year and Bitcoin ETF, you can compare the effects of market volatilities on Desjardins and Bitcoin ETF 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 Desjardins with a short position of Bitcoin ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desjardins and Bitcoin ETF.
Diversification Opportunities for Desjardins and Bitcoin ETF
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Desjardins and Bitcoin is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Desjardins 1 5 Year and Bitcoin ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin ETF and Desjardins 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 Desjardins 1 5 Year are associated (or correlated) with Bitcoin ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin ETF has no effect on the direction of Desjardins i.e., Desjardins and Bitcoin ETF go up and down completely randomly.
Pair Corralation between Desjardins and Bitcoin ETF
Assuming the 90 days trading horizon Desjardins is expected to generate 107.44 times less return on investment than Bitcoin ETF. But when comparing it to its historical volatility, Desjardins 1 5 Year is 24.04 times less risky than Bitcoin ETF. It trades about 0.08 of its potential returns per unit of risk. Bitcoin ETF is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 2,477 in Bitcoin ETF on September 1, 2024 and sell it today you would earn a total of 936.00 from holding Bitcoin ETF or generate 37.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Desjardins 1 5 Year vs. Bitcoin ETF
Performance |
| Timeline |
| Desjardins 1 5 |
| Bitcoin ETF |
Desjardins and Bitcoin ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desjardins and Bitcoin ETF
The main advantage of trading using opposite Desjardins and Bitcoin ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desjardins position performs unexpectedly, Bitcoin ETF 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 Bitcoin ETF will offset losses from the drop in Bitcoin ETF's long position.| Desjardins vs. Vanguard Total Market | Desjardins vs. iShares High Quality | Desjardins vs. iShares 1 10Yr Laddered | Desjardins vs. iShares Canadian HYBrid |
| Bitcoin ETF vs. Bitcoin ETF CAD | Bitcoin ETF vs. NBI High Yield | Bitcoin ETF vs. NBI Unconstrained Fixed | Bitcoin ETF 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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