Correlation Between IShares Bitcoin and IShares Trust
Can any of the company-specific risk be diversified away by investing in both IShares Bitcoin and IShares Trust 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 Bitcoin and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Bitcoin Trust and iShares Trust, you can compare the effects of market volatilities on IShares Bitcoin and IShares Trust 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 Bitcoin with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Bitcoin and IShares Trust.
Diversification Opportunities for IShares Bitcoin and IShares Trust
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and IShares is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares Bitcoin Trust and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and IShares Bitcoin 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 Bitcoin Trust are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of IShares Bitcoin i.e., IShares Bitcoin and IShares Trust go up and down completely randomly.
Pair Corralation between IShares Bitcoin and IShares Trust
Given the investment horizon of 90 days iShares Bitcoin Trust is expected to generate 4.78 times more return on investment than IShares Trust. However, IShares Bitcoin is 4.78 times more volatile than iShares Trust. It trades about 0.07 of its potential returns per unit of risk. iShares Trust is currently generating about 0.15 per unit of risk. If you would invest 3,128 in iShares Bitcoin Trust on September 13, 2024 and sell it today you would earn a total of 2,644 from holding iShares Bitcoin Trust or generate 84.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.34% |
| Values | Daily Returns |
iShares Bitcoin Trust vs. iShares Trust
Performance |
| Timeline |
| iShares Bitcoin Trust |
| iShares Trust |
IShares Bitcoin and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Bitcoin and IShares Trust
The main advantage of trading using opposite IShares Bitcoin and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Bitcoin position performs unexpectedly, IShares Trust 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 Trust will offset losses from the drop in IShares Trust's long position.| IShares Bitcoin vs. ProShares Trust | IShares Bitcoin vs. iShares Ethereum Trust | IShares Bitcoin vs. ProShares Trust | IShares Bitcoin vs. Grayscale Ethereum Trust |
| IShares Trust vs. First Trust Multi Asset | IShares Trust vs. Collaborative Investment Series | IShares Trust vs. EA Series Trust | IShares Trust vs. Aptus Defined Risk |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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