Correlation Between IPath Series and Bitwise Funds
Can any of the company-specific risk be diversified away by investing in both IPath Series 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 IPath Series and Bitwise Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iPath Series B and Bitwise Funds Trust, you can compare the effects of market volatilities on IPath Series 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 IPath Series with a short position of Bitwise Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPath Series and Bitwise Funds.
Diversification Opportunities for IPath Series and Bitwise Funds
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IPath and Bitwise is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding iPath Series B 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 IPath Series 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 iPath Series B 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 IPath Series i.e., IPath Series and Bitwise Funds go up and down completely randomly.
Pair Corralation between IPath Series and Bitwise Funds
Considering the 90-day investment horizon iPath Series B is expected to under-perform the Bitwise Funds. But the etf apears to be less risky and, when comparing its historical volatility, iPath Series B is 1.05 times less risky than Bitwise Funds. The etf trades about -0.2 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 4,158 in Bitwise Funds Trust on August 26, 2024 and sell it today you would earn a total of 1,668 from holding Bitwise Funds Trust or generate 40.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iPath Series B vs. Bitwise Funds Trust
Performance |
| Timeline |
| iPath Series B |
| Bitwise Funds Trust |
IPath Series and Bitwise Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPath Series and Bitwise Funds
The main advantage of trading using opposite IPath Series and Bitwise Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPath Series 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.| IPath Series vs. ProShares Ultra VIX | IPath Series vs. ProShares Short VIX | IPath Series vs. ProShares UltraPro Short | IPath Series vs. iShares 20 Year |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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