Correlation Between IShares Ethereum and Simplify Bitcoin
Can any of the company-specific risk be diversified away by investing in both IShares Ethereum and Simplify 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 Simplify 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 Simplify Bitcoin Strategy, you can compare the effects of market volatilities on IShares Ethereum and Simplify 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 Simplify Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Ethereum and Simplify Bitcoin.
Diversification Opportunities for IShares Ethereum and Simplify Bitcoin
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Simplify is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding iShares Ethereum Trust and Simplify Bitcoin Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Bitcoin Strategy 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 Simplify Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Bitcoin Strategy has no effect on the direction of IShares Ethereum i.e., IShares Ethereum and Simplify Bitcoin go up and down completely randomly.
Pair Corralation between IShares Ethereum and Simplify Bitcoin
Given the investment horizon of 90 days iShares Ethereum Trust is expected to under-perform the Simplify Bitcoin. But the etf apears to be less risky and, when comparing its historical volatility, iShares Ethereum Trust is 1.03 times less risky than Simplify Bitcoin. The etf trades about -0.06 of its potential returns per unit of risk. The Simplify Bitcoin Strategy is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,719 in Simplify Bitcoin Strategy on November 2, 2024 and sell it today you would earn a total of 383.00 from holding Simplify Bitcoin Strategy or generate 14.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Ethereum Trust vs. Simplify Bitcoin Strategy
Performance |
| Timeline |
| iShares Ethereum Trust |
| Simplify Bitcoin Strategy |
IShares Ethereum and Simplify Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Ethereum and Simplify Bitcoin
The main advantage of trading using opposite IShares Ethereum and Simplify Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Ethereum position performs unexpectedly, Simplify 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 Simplify Bitcoin will offset losses from the drop in Simplify Bitcoin's long position.| IShares Ethereum vs. ProShares Trust | IShares Ethereum vs. ProShares Trust | IShares Ethereum vs. Grayscale Ethereum Trust | IShares Ethereum vs. ProShares Trust |
| Simplify Bitcoin vs. ProShares Trust | Simplify Bitcoin vs. iShares Ethereum Trust | Simplify Bitcoin vs. ProShares Trust | Simplify 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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