Correlation Between Bitcoin ETF and IShares SP
Can any of the company-specific risk be diversified away by investing in both Bitcoin ETF and IShares SP 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 IShares SP 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 iShares SP Global, you can compare the effects of market volatilities on Bitcoin ETF and IShares SP 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 IShares SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin ETF and IShares SP.
Diversification Opportunities for Bitcoin ETF and IShares SP
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bitcoin and IShares is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin ETF CAD and iShares SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP Global 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 IShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SP Global has no effect on the direction of Bitcoin ETF i.e., Bitcoin ETF and IShares SP go up and down completely randomly.
Pair Corralation between Bitcoin ETF and IShares SP
Assuming the 90 days trading horizon Bitcoin ETF CAD is expected to generate 4.12 times more return on investment than IShares SP. However, Bitcoin ETF is 4.12 times more volatile than iShares SP Global. It trades about 0.2 of its potential returns per unit of risk. iShares SP Global is currently generating about 0.34 per unit of risk. If you would invest 4,350 in Bitcoin ETF CAD on September 12, 2024 and sell it today you would earn a total of 532.00 from holding Bitcoin ETF CAD or generate 12.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bitcoin ETF CAD vs. iShares SP Global
Performance |
| Timeline |
| Bitcoin ETF CAD |
| iShares SP Global |
Bitcoin ETF and IShares SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin ETF and IShares SP
The main advantage of trading using opposite Bitcoin ETF and IShares SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin ETF position performs unexpectedly, IShares SP 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 IShares SP will offset losses from the drop in IShares SP's long position.| Bitcoin ETF vs. 3iQ Bitcoin ETF | Bitcoin ETF vs. Purpose Bitcoin CAD | Bitcoin ETF vs. BMO Aggregate Bond | Bitcoin ETF vs. iShares Canadian HYBrid |
| IShares SP vs. iShares SP Global | IShares SP vs. iShares SPTSX Capped | IShares SP vs. iShares Global Healthcare | IShares SP vs. iShares Global Infrastructure |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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