Correlation Between IShares Core and 3iQ Bitcoin
Can any of the company-specific risk be diversified away by investing in both IShares Core and 3iQ 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 IShares Core and 3iQ Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SPTSX and 3iQ Bitcoin ETF, you can compare the effects of market volatilities on IShares Core and 3iQ 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 IShares Core with a short position of 3iQ Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and 3iQ Bitcoin.
Diversification Opportunities for IShares Core and 3iQ Bitcoin
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and 3iQ is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SPTSX and 3iQ Bitcoin ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3iQ Bitcoin ETF and IShares Core 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 iShares Core SPTSX are associated (or correlated) with 3iQ Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3iQ Bitcoin ETF has no effect on the direction of IShares Core i.e., IShares Core and 3iQ Bitcoin go up and down completely randomly.
Pair Corralation between IShares Core and 3iQ Bitcoin
Assuming the 90 days trading horizon IShares Core is expected to generate 10.22 times less return on investment than 3iQ Bitcoin. But when comparing it to its historical volatility, iShares Core SPTSX is 6.87 times less risky than 3iQ Bitcoin. It trades about 0.3 of its potential returns per unit of risk. 3iQ Bitcoin ETF is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 1,506 in 3iQ Bitcoin ETF on August 25, 2024 and sell it today you would earn a total of 704.00 from holding 3iQ Bitcoin ETF or generate 46.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares Core SPTSX vs. 3iQ Bitcoin ETF
Performance |
| Timeline |
| iShares Core SPTSX |
| 3iQ Bitcoin ETF |
IShares Core and 3iQ Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and 3iQ Bitcoin
The main advantage of trading using opposite IShares Core and 3iQ Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, 3iQ 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 3iQ Bitcoin will offset losses from the drop in 3iQ Bitcoin's long position.| IShares Core vs. iShares SPTSX 60 | IShares Core vs. iShares Core SP | IShares Core vs. iShares SPTSX Composite | IShares Core vs. iShares Core MSCI |
| 3iQ Bitcoin vs. Purpose Bitcoin CAD | 3iQ Bitcoin vs. 3iQ CoinShares Ether | 3iQ Bitcoin vs. BetaPro Inverse Bitcoin |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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