Correlation Between Vanguard FTSE and Bitwise Funds
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE 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 Vanguard FTSE and Bitwise Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Developed and Bitwise Funds Trust, you can compare the effects of market volatilities on Vanguard FTSE 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 Vanguard FTSE with a short position of Bitwise Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and Bitwise Funds.
Diversification Opportunities for Vanguard FTSE and Bitwise Funds
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and Bitwise is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed 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 Vanguard FTSE 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 Vanguard FTSE Developed 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 Vanguard FTSE i.e., Vanguard FTSE and Bitwise Funds go up and down completely randomly.
Pair Corralation between Vanguard FTSE and Bitwise Funds
Considering the 90-day investment horizon Vanguard FTSE Developed is expected to under-perform the Bitwise Funds. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard FTSE Developed is 5.29 times less risky than Bitwise Funds. The etf trades about -0.21 of its potential returns per unit of risk. The Bitwise Funds Trust is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 4,951 in Bitwise Funds Trust on August 23, 2024 and sell it today you would earn a total of 1,973 from holding Bitwise Funds Trust or generate 39.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Developed vs. Bitwise Funds Trust
Performance |
| Timeline |
| Vanguard FTSE Developed |
| Bitwise Funds Trust |
Vanguard FTSE and Bitwise Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and Bitwise Funds
The main advantage of trading using opposite Vanguard FTSE and Bitwise Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE 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.| Vanguard FTSE vs. Vanguard FTSE Emerging | Vanguard FTSE vs. Vanguard Small Cap Index | Vanguard FTSE vs. Vanguard Value Index | Vanguard FTSE vs. Vanguard Small Cap Value |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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