Correlation Between Bitcoin ETF and First Trust
Can any of the company-specific risk be diversified away by investing in both Bitcoin ETF and First Trust 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 First Trust 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 First Trust Cloud, you can compare the effects of market volatilities on Bitcoin ETF and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin ETF and First Trust.
Diversification Opportunities for Bitcoin ETF and First Trust
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bitcoin and First is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin ETF CAD and First Trust Cloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Cloud 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Cloud has no effect on the direction of Bitcoin ETF i.e., Bitcoin ETF and First Trust go up and down completely randomly.
Pair Corralation between Bitcoin ETF and First Trust
Assuming the 90 days trading horizon Bitcoin ETF CAD is expected to generate 2.39 times more return on investment than First Trust. However, Bitcoin ETF is 2.39 times more volatile than First Trust Cloud. It trades about 0.44 of its potential returns per unit of risk. First Trust Cloud is currently generating about 0.39 per unit of risk. If you would invest 3,350 in Bitcoin ETF CAD on September 3, 2024 and sell it today you would earn a total of 1,530 from holding Bitcoin ETF CAD or generate 45.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin ETF CAD vs. First Trust Cloud
Performance |
| Timeline |
| Bitcoin ETF CAD |
| First Trust Cloud |
Bitcoin ETF and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin ETF and First Trust
The main advantage of trading using opposite Bitcoin ETF and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin ETF position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust'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 |
| First Trust vs. First Trust Indxx | First Trust vs. First Trust Senior | First Trust vs. First Trust AlphaDEX | First Trust vs. First Trust Indxx |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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