Correlation Between Bitcoin ETF and NBI Unconstrained
Can any of the company-specific risk be diversified away by investing in both Bitcoin ETF and NBI Unconstrained 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 NBI Unconstrained 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 NBI Unconstrained Fixed, you can compare the effects of market volatilities on Bitcoin ETF and NBI Unconstrained 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 NBI Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin ETF and NBI Unconstrained.
Diversification Opportunities for Bitcoin ETF and NBI Unconstrained
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bitcoin and NBI is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin ETF CAD and NBI Unconstrained Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI Unconstrained Fixed 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 NBI Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI Unconstrained Fixed has no effect on the direction of Bitcoin ETF i.e., Bitcoin ETF and NBI Unconstrained go up and down completely randomly.
Pair Corralation between Bitcoin ETF and NBI Unconstrained
Assuming the 90 days trading horizon Bitcoin ETF CAD is expected to generate 7.77 times more return on investment than NBI Unconstrained. However, Bitcoin ETF is 7.77 times more volatile than NBI Unconstrained Fixed. It trades about 0.13 of its potential returns per unit of risk. NBI Unconstrained Fixed is currently generating about 0.06 per unit of risk. If you would invest 1,265 in Bitcoin ETF CAD on September 4, 2024 and sell it today you would earn a total of 3,540 from holding Bitcoin ETF CAD or generate 279.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin ETF CAD vs. NBI Unconstrained Fixed
Performance |
| Timeline |
| Bitcoin ETF CAD |
| NBI Unconstrained Fixed |
Bitcoin ETF and NBI Unconstrained Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin ETF and NBI Unconstrained
The main advantage of trading using opposite Bitcoin ETF and NBI Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin ETF position performs unexpectedly, NBI Unconstrained 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 NBI Unconstrained will offset losses from the drop in NBI Unconstrained'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 |
| NBI Unconstrained vs. NBI High Yield | NBI Unconstrained vs. NBI Active Canadian | NBI Unconstrained vs. Picton Mahoney Fortified | NBI Unconstrained vs. NBI Liquid Alternatives |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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