Correlation Between BetaPro SP and Bitcoin ETF
Can any of the company-specific risk be diversified away by investing in both BetaPro SP 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 SP 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 SP 500 and Bitcoin ETF CAD, you can compare the effects of market volatilities on BetaPro SP 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 SP with a short position of Bitcoin ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SP and Bitcoin ETF.
Diversification Opportunities for BetaPro SP and Bitcoin ETF
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BetaPro and Bitcoin is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SP 500 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 SP 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 SP 500 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 SP i.e., BetaPro SP and Bitcoin ETF go up and down completely randomly.
Pair Corralation between BetaPro SP and Bitcoin ETF
Assuming the 90 days trading horizon BetaPro SP 500 is expected to under-perform the Bitcoin ETF. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro SP 500 is 1.09 times less risky than Bitcoin ETF. The etf trades about -0.18 of its potential returns per unit of risk. The Bitcoin ETF CAD is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 3,457 in Bitcoin ETF CAD on August 28, 2024 and sell it today you would earn a total of 1,122 from holding Bitcoin ETF CAD or generate 32.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro SP 500 vs. Bitcoin ETF CAD
Performance |
| Timeline |
| BetaPro SP 500 |
| Bitcoin ETF CAD |
BetaPro SP and Bitcoin ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SP and Bitcoin ETF
The main advantage of trading using opposite BetaPro SP and Bitcoin ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SP 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.| BetaPro SP vs. BetaPro NASDAQ 100 2x | BetaPro SP vs. BetaPro SP 500 | BetaPro SP vs. BetaPro SP 500 | BetaPro SP vs. BetaPro SP 500 |
| Bitcoin ETF vs. Bitcoin ETF | Bitcoin ETF vs. NBI High Yield | Bitcoin ETF vs. NBI Unconstrained Fixed | Bitcoin ETF vs. Mackenzie Developed ex North |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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