Correlation Between Bitcoin ETF and Purpose Gold
Can any of the company-specific risk be diversified away by investing in both Bitcoin ETF and Purpose Gold 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 Bitcoin ETF and Purpose Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin ETF CAD and Purpose Gold Bullion, you can compare the effects of market volatilities on Bitcoin ETF and Purpose Gold 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 Bitcoin ETF with a short position of Purpose Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin ETF and Purpose Gold.
Diversification Opportunities for Bitcoin ETF and Purpose Gold
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bitcoin and Purpose is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin ETF CAD and Purpose Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purpose Gold Bullion and Bitcoin ETF 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 Bitcoin ETF CAD are associated (or correlated) with Purpose Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purpose Gold Bullion has no effect on the direction of Bitcoin ETF i.e., Bitcoin ETF and Purpose Gold go up and down completely randomly.
Pair Corralation between Bitcoin ETF and Purpose Gold
Assuming the 90 days trading horizon Bitcoin ETF CAD is expected to generate 3.74 times more return on investment than Purpose Gold. However, Bitcoin ETF is 3.74 times more volatile than Purpose Gold Bullion. It trades about 0.06 of its potential returns per unit of risk. Purpose Gold Bullion is currently generating about -0.02 per unit of risk. If you would invest 4,970 in Bitcoin ETF CAD on October 23, 2024 and sell it today you would earn a total of 316.00 from holding Bitcoin ETF CAD or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin ETF CAD vs. Purpose Gold Bullion
Performance |
| Timeline |
| Bitcoin ETF CAD |
| Purpose Gold Bullion |
Bitcoin ETF and Purpose Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin ETF and Purpose Gold
The main advantage of trading using opposite Bitcoin ETF and Purpose Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin ETF position performs unexpectedly, Purpose Gold 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 Purpose Gold will offset losses from the drop in Purpose Gold's long position.| Bitcoin ETF vs. Bitcoin ETF | Bitcoin ETF vs. NBI High Yield | Bitcoin ETF vs. NBI Unconstrained Fixed | Bitcoin ETF vs. Mackenzie Developed ex North |
| Purpose Gold vs. Royal Canadian Mint | Purpose Gold vs. iShares Gold Bullion | Purpose Gold vs. Global X Gold | Purpose Gold vs. Purpose Gold Bullion |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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