Can any of the company-specific risk be diversified away by investing in both Bitwise Crypto and Valkyrie 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 Bitwise Crypto and Valkyrie Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitwise Crypto Industry and Valkyrie Bitcoin Miners, you can compare the effects of market volatilities on Bitwise Crypto and Valkyrie 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 Bitwise Crypto with a short position of Valkyrie Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise Crypto and Valkyrie Bitcoin.
Diversification Opportunities for Bitwise Crypto and Valkyrie Bitcoin
The 3 months correlation between Bitwise and Valkyrie is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise Crypto Industry and Valkyrie Bitcoin Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valkyrie Bitcoin Miners and Bitwise Crypto 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 Bitwise Crypto Industry are associated (or correlated) with Valkyrie Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valkyrie Bitcoin Miners has no effect on the direction of Bitwise Crypto i.e., Bitwise Crypto and Valkyrie Bitcoin go up and down completely randomly.
Pair Corralation between Bitwise Crypto and Valkyrie Bitcoin
Given the investment horizon of 90 days Bitwise Crypto is expected to generate 1.12 times less return on investment than Valkyrie Bitcoin. But when comparing it to its historical volatility, Bitwise Crypto Industry is 1.28 times less risky than Valkyrie Bitcoin. It trades about 0.03 of its potential returns per unit of risk. Valkyrie Bitcoin Miners is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,645 in Valkyrie Bitcoin Miners on March 6, 2024 and sell it today you would earn a total of 14.00 from holding Valkyrie Bitcoin Miners or generate 0.85% return on investment over 90 days.
Compared to the overall equity markets, risk-adjusted returns on investments in Bitwise Crypto Industry are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Bitwise Crypto may actually be approaching a critical reversion point that can send shares even higher in July 2024.
Compared to the overall equity markets, risk-adjusted returns on investments in Valkyrie Bitcoin Miners are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating primary indicators, Valkyrie Bitcoin may actually be approaching a critical reversion point that can send shares even higher in July 2024.