Correlation Between NBI High and Bitcoin ETF
Can any of the company-specific risk be diversified away by investing in both NBI High 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 NBI High and Bitcoin ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBI High Yield and Bitcoin ETF, you can compare the effects of market volatilities on NBI High 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 NBI High with a short position of Bitcoin ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI High and Bitcoin ETF.
Diversification Opportunities for NBI High and Bitcoin ETF
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NBI and Bitcoin is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding NBI High Yield and Bitcoin ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin ETF and NBI High 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 NBI High Yield 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 has no effect on the direction of NBI High i.e., NBI High and Bitcoin ETF go up and down completely randomly.
Pair Corralation between NBI High and Bitcoin ETF
Assuming the 90 days trading horizon NBI High is expected to generate 4.89 times less return on investment than Bitcoin ETF. But when comparing it to its historical volatility, NBI High Yield is 1.03 times less risky than Bitcoin ETF. It trades about 0.03 of its potential returns per unit of risk. Bitcoin ETF is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 659.00 in Bitcoin ETF on September 3, 2024 and sell it today you would earn a total of 2,754 from holding Bitcoin ETF or generate 417.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.5% |
| Values | Daily Returns |
NBI High Yield vs. Bitcoin ETF
Performance |
| Timeline |
| NBI High Yield |
| Bitcoin ETF |
NBI High and Bitcoin ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI High and Bitcoin ETF
The main advantage of trading using opposite NBI High and Bitcoin ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI High 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.| NBI High vs. NBI Unconstrained Fixed | NBI High vs. NBI Active Canadian | NBI High vs. NBI Sustainable Canadian | NBI High vs. Picton Mahoney Fortified |
| Bitcoin ETF vs. Bitcoin ETF CAD | 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |