Correlation Between SPDR SP and Bitwise Crypto
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Bitwise Crypto 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 SPDR SP and Bitwise Crypto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and Bitwise Crypto Industry, you can compare the effects of market volatilities on SPDR SP and Bitwise Crypto 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 SPDR SP with a short position of Bitwise Crypto. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Bitwise Crypto.
Diversification Opportunities for SPDR SP and Bitwise Crypto
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and Bitwise is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and Bitwise Crypto Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Crypto Industry and SPDR SP 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 SPDR SP 500 are associated (or correlated) with Bitwise Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Crypto Industry has no effect on the direction of SPDR SP i.e., SPDR SP and Bitwise Crypto go up and down completely randomly.
Pair Corralation between SPDR SP and Bitwise Crypto
Considering the 90-day investment horizon SPDR SP is expected to generate 3.89 times less return on investment than Bitwise Crypto. But when comparing it to its historical volatility, SPDR SP 500 is 5.73 times less risky than Bitwise Crypto. It trades about 0.15 of its potential returns per unit of risk. Bitwise Crypto Industry is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 883.00 in Bitwise Crypto Industry on August 27, 2024 and sell it today you would earn a total of 1,191 from holding Bitwise Crypto Industry or generate 134.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 500 vs. Bitwise Crypto Industry
Performance |
| Timeline |
| SPDR SP 500 |
| Bitwise Crypto Industry |
SPDR SP and Bitwise Crypto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Bitwise Crypto
The main advantage of trading using opposite SPDR SP and Bitwise Crypto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Bitwise Crypto 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 Crypto will offset losses from the drop in Bitwise Crypto's long position.| SPDR SP vs. FT Vest Equity | SPDR SP vs. Northern Lights | SPDR SP vs. Dimensional International High | SPDR SP vs. First Trust Exchange Traded |
| Bitwise Crypto vs. Bitwise 10 Crypto | Bitwise Crypto vs. VanEck Digital Transformation | Bitwise Crypto vs. Global X Blockchain | Bitwise Crypto vs. First Trust Indxx |
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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