Correlation Between IPath Series and Franklin Bitcoin
Can any of the company-specific risk be diversified away by investing in both IPath Series and Franklin Bitcoin 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 Franklin Bitcoin 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 Franklin Bitcoin ETF, you can compare the effects of market volatilities on IPath Series and Franklin Bitcoin 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 Franklin Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPath Series and Franklin Bitcoin.
Diversification Opportunities for IPath Series and Franklin Bitcoin
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IPath and Franklin is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding iPath Series B and Franklin Bitcoin ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Bitcoin ETF 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 Franklin Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Bitcoin ETF has no effect on the direction of IPath Series i.e., IPath Series and Franklin Bitcoin go up and down completely randomly.
Pair Corralation between IPath Series and Franklin Bitcoin
Considering the 90-day investment horizon iPath Series B is expected to under-perform the Franklin Bitcoin. In addition to that, IPath Series is 1.16 times more volatile than Franklin Bitcoin ETF. It trades about -0.06 of its total potential returns per unit of risk. Franklin Bitcoin ETF is currently generating about 0.11 per unit of volatility. If you would invest 2,705 in Franklin Bitcoin ETF on August 26, 2024 and sell it today you would earn a total of 3,055 from holding Franklin Bitcoin ETF or generate 112.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 44.47% |
| Values | Daily Returns |
iPath Series B vs. Franklin Bitcoin ETF
Performance |
| Timeline |
| iPath Series B |
| Franklin Bitcoin ETF |
IPath Series and Franklin Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPath Series and Franklin Bitcoin
The main advantage of trading using opposite IPath Series and Franklin Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPath Series position performs unexpectedly, Franklin Bitcoin 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 Franklin Bitcoin will offset losses from the drop in Franklin Bitcoin's long position.| IPath Series vs. ProShares VIX Short Term | IPath Series vs. ProShares UltraShort Yen | IPath Series vs. iPath Series B |
| Franklin Bitcoin vs. Grayscale Bitcoin Trust | Franklin Bitcoin vs. Siren Nasdaq NexGen | Franklin Bitcoin vs. Grayscale Bitcoin Mini | Franklin Bitcoin vs. First Trust SkyBridge |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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