Correlation Between Vanguard and 21Shares Bitwise

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Can any of the company-specific risk be diversified away by investing in both Vanguard and 21Shares Bitwise 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 and 21Shares Bitwise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard SP 500 and 21Shares Bitwise Select, you can compare the effects of market volatilities on Vanguard and 21Shares Bitwise 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 with a short position of 21Shares Bitwise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and 21Shares Bitwise.

Diversification Opportunities for Vanguard and 21Shares Bitwise

Vanguard21SharesDiversified AwayVanguard21SharesDiversified Away100%
-0.14
  Correlation Coefficient

Good diversification

The 3 months correlation between Vanguard and 21Shares is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP 500 and 21Shares Bitwise Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 21Shares Bitwise Select and Vanguard 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 SP 500 are associated (or correlated) with 21Shares Bitwise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 21Shares Bitwise Select has no effect on the direction of Vanguard i.e., Vanguard and 21Shares Bitwise go up and down completely randomly.

Pair Corralation between Vanguard and 21Shares Bitwise

Assuming the 90 days trading horizon Vanguard SP 500 is expected to generate 0.28 times more return on investment than 21Shares Bitwise. However, Vanguard SP 500 is 3.55 times less risky than 21Shares Bitwise. It trades about 0.05 of its potential returns per unit of risk. 21Shares Bitwise Select is currently generating about -0.17 per unit of risk. If you would invest  10,382  in Vanguard SP 500 on November 20, 2024 and sell it today you would earn a total of  90.00  from holding Vanguard SP 500 or generate 0.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Vanguard SP 500  vs.  21Shares Bitwise Select

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 010203040
JavaScript chart by amCharts 3.21.15VUSA KEYS
       Timeline  
Vanguard SP 500 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard SP 500 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Vanguard may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb9899100101102103104105
21Shares Bitwise Select 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in 21Shares Bitwise Select are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, 21Shares Bitwise is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3132333435363738

Vanguard and 21Shares Bitwise Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.42-1.82-1.21-0.60.01080.651.31.952.59 0.10.20.30.40.50.6
JavaScript chart by amCharts 3.21.15VUSA KEYS
       Returns  

Pair Trading with Vanguard and 21Shares Bitwise

The main advantage of trading using opposite Vanguard and 21Shares Bitwise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard position performs unexpectedly, 21Shares Bitwise 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 21Shares Bitwise will offset losses from the drop in 21Shares Bitwise's long position.
The idea behind Vanguard SP 500 and 21Shares Bitwise Select pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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