Correlation Between Bitcoin ETF and Vanguard FTSE
Can any of the company-specific risk be diversified away by investing in both Bitcoin ETF and Vanguard FTSE 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 Vanguard FTSE 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 Vanguard FTSE Canadian, you can compare the effects of market volatilities on Bitcoin ETF and Vanguard FTSE 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 Vanguard FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin ETF and Vanguard FTSE.
Diversification Opportunities for Bitcoin ETF and Vanguard FTSE
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bitcoin and Vanguard is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin ETF CAD and Vanguard FTSE Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Canadian 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 Vanguard FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Canadian has no effect on the direction of Bitcoin ETF i.e., Bitcoin ETF and Vanguard FTSE go up and down completely randomly.
Pair Corralation between Bitcoin ETF and Vanguard FTSE
Assuming the 90 days trading horizon Bitcoin ETF CAD is expected to generate 6.68 times more return on investment than Vanguard FTSE. However, Bitcoin ETF is 6.68 times more volatile than Vanguard FTSE Canadian. It trades about 0.45 of its potential returns per unit of risk. Vanguard FTSE Canadian is currently generating about -0.23 per unit of risk. If you would invest 3,292 in Bitcoin ETF CAD on August 24, 2024 and sell it today you would earn a total of 1,625 from holding Bitcoin ETF CAD or generate 49.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin ETF CAD vs. Vanguard FTSE Canadian
Performance |
| Timeline |
| Bitcoin ETF CAD |
| Vanguard FTSE Canadian |
Bitcoin ETF and Vanguard FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin ETF and Vanguard FTSE
The main advantage of trading using opposite Bitcoin ETF and Vanguard FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin ETF position performs unexpectedly, Vanguard FTSE 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 Vanguard FTSE will offset losses from the drop in Vanguard FTSE's long position.| Bitcoin ETF vs. 3iQ Bitcoin ETF | Bitcoin ETF vs. Purpose Bitcoin CAD | Bitcoin ETF vs. 3iQ CoinShares Ether | Bitcoin ETF vs. BetaPro Inverse Bitcoin |
| Vanguard FTSE vs. Vanguard FTSE Canadian | Vanguard FTSE vs. iShares SPTSX Composite | Vanguard FTSE vs. iShares SPTSX Capped | Vanguard FTSE vs. BMO Equal Weight |
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 CEOs Directory module to screen CEOs from public companies around the world.
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