Correlation Between Simplify Equity and Bitwise Ethereum
Can any of the company-specific risk be diversified away by investing in both Simplify Equity and Bitwise Ethereum 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 Simplify Equity and Bitwise Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simplify Equity PLUS and Bitwise Ethereum ETF, you can compare the effects of market volatilities on Simplify Equity and Bitwise Ethereum 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 Simplify Equity with a short position of Bitwise Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Equity and Bitwise Ethereum.
Diversification Opportunities for Simplify Equity and Bitwise Ethereum
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Simplify and Bitwise is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Equity PLUS and Bitwise Ethereum ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Ethereum ETF and Simplify Equity 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 Simplify Equity PLUS are associated (or correlated) with Bitwise Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Ethereum ETF has no effect on the direction of Simplify Equity i.e., Simplify Equity and Bitwise Ethereum go up and down completely randomly.
Pair Corralation between Simplify Equity and Bitwise Ethereum
Given the investment horizon of 90 days Simplify Equity PLUS is expected to generate 0.23 times more return on investment than Bitwise Ethereum. However, Simplify Equity PLUS is 4.35 times less risky than Bitwise Ethereum. It trades about 0.14 of its potential returns per unit of risk. Bitwise Ethereum ETF is currently generating about 0.02 per unit of risk. If you would invest 2,017 in Simplify Equity PLUS on August 23, 2024 and sell it today you would earn a total of 1,940 from holding Simplify Equity PLUS or generate 96.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 17.54% |
| Values | Daily Returns |
Simplify Equity PLUS vs. Bitwise Ethereum ETF
Performance |
| Timeline |
| Simplify Equity PLUS |
| Bitwise Ethereum ETF |
Simplify Equity and Bitwise Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplify Equity and Bitwise Ethereum
The main advantage of trading using opposite Simplify Equity and Bitwise Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify Equity position performs unexpectedly, Bitwise Ethereum 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 Ethereum will offset losses from the drop in Bitwise Ethereum's long position.| Simplify Equity vs. First Trust SkyBridge | Simplify Equity vs. VanEck Digital Transformation | Simplify Equity vs. Global X Blockchain | Simplify Equity vs. Bitcoin Strategy Profund |
| Bitwise Ethereum vs. ProShares Bitcoin Strategy | Bitwise Ethereum vs. Bitwise 10 Crypto | Bitwise Ethereum vs. Global X Blockchain |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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