Correlation Between IShares SPTSX and Ninepoint Bitcoin
Can any of the company-specific risk be diversified away by investing in both IShares SPTSX and Ninepoint 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 SPTSX and Ninepoint Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SPTSX 60 and Ninepoint Bitcoin ETF, you can compare the effects of market volatilities on IShares SPTSX and Ninepoint 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 SPTSX with a short position of Ninepoint Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and Ninepoint Bitcoin.
Diversification Opportunities for IShares SPTSX and Ninepoint Bitcoin
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Ninepoint is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX 60 and Ninepoint Bitcoin ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ninepoint Bitcoin ETF and IShares SPTSX 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 SPTSX 60 are associated (or correlated) with Ninepoint Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ninepoint Bitcoin ETF has no effect on the direction of IShares SPTSX i.e., IShares SPTSX and Ninepoint Bitcoin go up and down completely randomly.
Pair Corralation between IShares SPTSX and Ninepoint Bitcoin
Assuming the 90 days trading horizon IShares SPTSX is expected to generate 2.1 times less return on investment than Ninepoint Bitcoin. But when comparing it to its historical volatility, iShares SPTSX 60 is 3.42 times less risky than Ninepoint Bitcoin. It trades about 0.18 of its potential returns per unit of risk. Ninepoint Bitcoin ETF is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,266 in Ninepoint Bitcoin ETF on September 3, 2024 and sell it today you would earn a total of 451.00 from holding Ninepoint Bitcoin ETF or generate 35.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.32% |
| Values | Daily Returns |
iShares SPTSX 60 vs. Ninepoint Bitcoin ETF
Performance |
| Timeline |
| iShares SPTSX 60 |
| Ninepoint Bitcoin ETF |
IShares SPTSX and Ninepoint Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and Ninepoint Bitcoin
The main advantage of trading using opposite IShares SPTSX and Ninepoint Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPTSX position performs unexpectedly, Ninepoint 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 Ninepoint Bitcoin will offset losses from the drop in Ninepoint Bitcoin's long position.| IShares SPTSX vs. iShares Core SP | IShares SPTSX vs. iShares Core SPTSX | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Capped |
| Ninepoint Bitcoin vs. Ninepoint Energy | Ninepoint Bitcoin vs. Ninepoint Bitcoin ETF | Ninepoint Bitcoin vs. Ninepoint Web3 Innovators | Ninepoint Bitcoin vs. Ninepoint Energy Income |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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