Correlation Between IShares Ethereum and Bitwise Bitcoin
Can any of the company-specific risk be diversified away by investing in both IShares Ethereum and Bitwise Bitcoin 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 IShares Ethereum and Bitwise Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Ethereum Trust and Bitwise Bitcoin ETF, you can compare the effects of market volatilities on IShares Ethereum and Bitwise Bitcoin 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 IShares Ethereum with a short position of Bitwise Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Ethereum and Bitwise Bitcoin.
Diversification Opportunities for IShares Ethereum and Bitwise Bitcoin
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Bitwise is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares Ethereum Trust and Bitwise Bitcoin ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Bitcoin ETF and IShares Ethereum 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 iShares Ethereum Trust are associated (or correlated) with Bitwise Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Bitcoin ETF has no effect on the direction of IShares Ethereum i.e., IShares Ethereum and Bitwise Bitcoin go up and down completely randomly.
Pair Corralation between IShares Ethereum and Bitwise Bitcoin
Given the investment horizon of 90 days IShares Ethereum is expected to generate 8.72 times less return on investment than Bitwise Bitcoin. In addition to that, IShares Ethereum is 1.26 times more volatile than Bitwise Bitcoin ETF. It trades about 0.01 of its total potential returns per unit of risk. Bitwise Bitcoin ETF is currently generating about 0.11 per unit of volatility. If you would invest 2,554 in Bitwise Bitcoin ETF on August 26, 2024 and sell it today you would earn a total of 2,856 from holding Bitwise Bitcoin ETF or generate 111.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 40.27% |
| Values | Daily Returns |
iShares Ethereum Trust vs. Bitwise Bitcoin ETF
Performance |
| Timeline |
| iShares Ethereum Trust |
| Bitwise Bitcoin ETF |
IShares Ethereum and Bitwise Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Ethereum and Bitwise Bitcoin
The main advantage of trading using opposite IShares Ethereum and Bitwise Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Ethereum position performs unexpectedly, Bitwise Bitcoin 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 Bitwise Bitcoin will offset losses from the drop in Bitwise Bitcoin's long position.| IShares Ethereum vs. Grayscale Bitcoin Trust | IShares Ethereum vs. Siren Nasdaq NexGen | IShares Ethereum vs. Grayscale Bitcoin Mini | IShares Ethereum vs. First Trust SkyBridge |
| Bitwise Bitcoin vs. ProShares Trust | Bitwise Bitcoin vs. iShares Ethereum Trust | Bitwise Bitcoin vs. ProShares Trust | Bitwise Bitcoin vs. Grayscale Ethereum Trust |
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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