Correlation Between NYSE Composite and IShares Bitcoin
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and IShares Bitcoin 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 NYSE Composite and IShares Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and iShares Bitcoin Trust, you can compare the effects of market volatilities on NYSE Composite and IShares Bitcoin 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 NYSE Composite with a short position of IShares Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and IShares Bitcoin.
Diversification Opportunities for NYSE Composite and IShares Bitcoin
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and IShares is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and iShares Bitcoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Bitcoin Trust and NYSE Composite 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 NYSE Composite are associated (or correlated) with IShares Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Bitcoin Trust has no effect on the direction of NYSE Composite i.e., NYSE Composite and IShares Bitcoin go up and down completely randomly.
Pair Corralation between NYSE Composite and IShares Bitcoin
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.25 times more return on investment than IShares Bitcoin. However, NYSE Composite is 3.99 times less risky than IShares Bitcoin. It trades about -0.02 of its potential returns per unit of risk. iShares Bitcoin Trust is currently generating about -0.27 per unit of risk. If you would invest 1,998,000 in NYSE Composite on November 28, 2024 and sell it today you would lose (5,595) from holding NYSE Composite or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. iShares Bitcoin Trust
Performance |
| Timeline |
NYSE Composite and IShares Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
iShares Bitcoin Trust
Pair trading matchups for IShares Bitcoin
Pair Trading with NYSE Composite and IShares Bitcoin
The main advantage of trading using opposite NYSE Composite and IShares Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, IShares Bitcoin 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 Bitcoin will offset losses from the drop in IShares Bitcoin's long position.| NYSE Composite vs. Inter Parfums | NYSE Composite vs. Amkor Technology | NYSE Composite vs. Unilever PLC ADR | NYSE Composite vs. Estee Lauder Companies |
| IShares Bitcoin vs. Grayscale Funds Trust | IShares Bitcoin vs. ProShares Trust | IShares Bitcoin vs. iShares Ethereum Trust | IShares Bitcoin vs. ProShares Trust |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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