Correlation Between IPath Series and IShares Bitcoin
Can any of the company-specific risk be diversified away by investing in both IPath Series and IShares 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 IShares 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 iShares Bitcoin Trust, you can compare the effects of market volatilities on IPath Series and IShares 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 IShares Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPath Series and IShares Bitcoin.
Diversification Opportunities for IPath Series and IShares Bitcoin
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IPath and IShares is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding iPath Series B and iShares Bitcoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Bitcoin 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 IShares Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Bitcoin Trust has no effect on the direction of IPath Series i.e., IPath Series and IShares Bitcoin go up and down completely randomly.
Pair Corralation between IPath Series and IShares Bitcoin
Considering the 90-day investment horizon iPath Series B is expected to under-perform the IShares Bitcoin. In addition to that, IPath Series is 1.19 times more volatile than iShares Bitcoin Trust. It trades about -0.06 of its total potential returns per unit of risk. iShares Bitcoin Trust is currently generating about 0.07 per unit of volatility. If you would invest 2,961 in iShares Bitcoin Trust on August 30, 2024 and sell it today you would earn a total of 2,542 from holding iShares Bitcoin Trust or generate 85.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 64.92% |
| Values | Daily Returns |
iPath Series B vs. iShares Bitcoin Trust
Performance |
| Timeline |
| iPath Series B |
| iShares Bitcoin Trust |
IPath Series and IShares Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPath Series and IShares Bitcoin
The main advantage of trading using opposite IPath Series and IShares Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPath Series position performs unexpectedly, IShares 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 IShares Bitcoin will offset losses from the drop in IShares Bitcoin's 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 |
| IShares Bitcoin vs. ProShares Trust | IShares Bitcoin vs. iShares Ethereum Trust | IShares Bitcoin vs. ProShares Trust | IShares Bitcoin 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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