Correlation Between BetaPro Equal and Bitcoin ETF

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Can any of the company-specific risk be diversified away by investing in both BetaPro Equal and Bitcoin ETF 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 BetaPro Equal and Bitcoin ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro Equal Weight and Bitcoin ETF CAD, you can compare the effects of market volatilities on BetaPro Equal and Bitcoin ETF 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 BetaPro Equal with a short position of Bitcoin ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro Equal and Bitcoin ETF.

Diversification Opportunities for BetaPro Equal and Bitcoin ETF

0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between BetaPro and Bitcoin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Equal Weight and Bitcoin ETF CAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin ETF CAD and BetaPro Equal 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 BetaPro Equal Weight are associated (or correlated) with Bitcoin ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin ETF CAD has no effect on the direction of BetaPro Equal i.e., BetaPro Equal and Bitcoin ETF go up and down completely randomly.

Pair Corralation between BetaPro Equal and Bitcoin ETF

Assuming the 90 days trading horizon BetaPro Equal is expected to generate 1.46 times less return on investment than Bitcoin ETF. But when comparing it to its historical volatility, BetaPro Equal Weight is 2.17 times less risky than Bitcoin ETF. It trades about 0.23 of its potential returns per unit of risk. Bitcoin ETF CAD is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  5,000  in Bitcoin ETF CAD on November 2, 2024 and sell it today you would earn a total of  417.00  from holding Bitcoin ETF CAD or generate 8.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

BetaPro Equal Weight  vs.  Bitcoin ETF CAD

 Performance 
       Timeline  
BetaPro Equal Weight 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in BetaPro Equal Weight are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, BetaPro Equal displayed solid returns over the last few months and may actually be approaching a breakup point.
Bitcoin ETF CAD 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin ETF CAD are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Bitcoin ETF displayed solid returns over the last few months and may actually be approaching a breakup point.

BetaPro Equal and Bitcoin ETF Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BetaPro Equal and Bitcoin ETF

The main advantage of trading using opposite BetaPro Equal and Bitcoin ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro Equal position performs unexpectedly, Bitcoin ETF 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 Bitcoin ETF will offset losses from the drop in Bitcoin ETF's long position.
The idea behind BetaPro Equal Weight and Bitcoin ETF CAD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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