Correlation Between Innovator ETFs and Bitwise Funds
Can any of the company-specific risk be diversified away by investing in both Innovator ETFs and Bitwise Funds 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 Innovator ETFs and Bitwise Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovator ETFs Trust and Bitwise Funds Trust, you can compare the effects of market volatilities on Innovator ETFs and Bitwise Funds 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 Innovator ETFs with a short position of Bitwise Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator ETFs and Bitwise Funds.
Diversification Opportunities for Innovator ETFs and Bitwise Funds
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innovator and Bitwise is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and Bitwise Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Funds Trust and Innovator ETFs 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 Innovator ETFs Trust are associated (or correlated) with Bitwise Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Funds Trust has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and Bitwise Funds go up and down completely randomly.
Pair Corralation between Innovator ETFs and Bitwise Funds
Given the investment horizon of 90 days Innovator ETFs is expected to generate 26.87 times less return on investment than Bitwise Funds. But when comparing it to its historical volatility, Innovator ETFs Trust is 17.52 times less risky than Bitwise Funds. It trades about 0.2 of its potential returns per unit of risk. Bitwise Funds Trust is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 4,473 in Bitwise Funds Trust on August 30, 2024 and sell it today you would earn a total of 1,543 from holding Bitwise Funds Trust or generate 34.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Innovator ETFs Trust vs. Bitwise Funds Trust
Performance |
| Timeline |
| Innovator ETFs Trust |
| Bitwise Funds Trust |
Innovator ETFs and Bitwise Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator ETFs and Bitwise Funds
The main advantage of trading using opposite Innovator ETFs and Bitwise Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator ETFs position performs unexpectedly, Bitwise Funds 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 Bitwise Funds will offset losses from the drop in Bitwise Funds' long position.| Innovator ETFs vs. Innovator Growth Accelerated | Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. Innovator ETFs Trust |
| Bitwise Funds vs. ProShares Trust | Bitwise Funds vs. iShares Ethereum Trust | Bitwise Funds vs. ProShares Trust | Bitwise Funds vs. Grayscale Ethereum 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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