Correlation Between IShares Bitcoin and VanEck CEF
Can any of the company-specific risk be diversified away by investing in both IShares Bitcoin and VanEck CEF 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 VanEck CEF 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 VanEck CEF Municipal, you can compare the effects of market volatilities on IShares Bitcoin and VanEck CEF 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 VanEck CEF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Bitcoin and VanEck CEF.
Diversification Opportunities for IShares Bitcoin and VanEck CEF
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and VanEck is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding iShares Bitcoin Trust and VanEck CEF Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck CEF Municipal 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 VanEck CEF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck CEF Municipal has no effect on the direction of IShares Bitcoin i.e., IShares Bitcoin and VanEck CEF go up and down completely randomly.
Pair Corralation between IShares Bitcoin and VanEck CEF
Given the investment horizon of 90 days iShares Bitcoin Trust is expected to generate 7.68 times more return on investment than VanEck CEF. However, IShares Bitcoin is 7.68 times more volatile than VanEck CEF Municipal. It trades about 0.3 of its potential returns per unit of risk. VanEck CEF Municipal is currently generating about 0.1 per unit of risk. If you would invest 3,967 in iShares Bitcoin Trust on August 28, 2024 and sell it today you would earn a total of 1,203 from holding iShares Bitcoin Trust or generate 30.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Bitcoin Trust vs. VanEck CEF Municipal
Performance |
| Timeline |
| iShares Bitcoin Trust |
| VanEck CEF Municipal |
IShares Bitcoin and VanEck CEF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Bitcoin and VanEck CEF
The main advantage of trading using opposite IShares Bitcoin and VanEck CEF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Bitcoin position performs unexpectedly, VanEck CEF 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 VanEck CEF will offset losses from the drop in VanEck CEF's long position.| IShares Bitcoin vs. Grayscale Bitcoin Trust | IShares Bitcoin vs. Grayscale Bitcoin Mini | IShares Bitcoin vs. First Trust SkyBridge |
| VanEck CEF vs. VanEck Long Muni | VanEck CEF vs. VanEck Short High | VanEck CEF vs. SPDR Nuveen Bloomberg | VanEck CEF vs. VanEck High Yield |
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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