Correlation Between Cboe Vest and Bitcoin Strategy

Can any of the company-specific risk be diversified away by investing in both Cboe Vest and Bitcoin Strategy 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 Cboe Vest and Bitcoin Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cboe Vest Bitcoin and Bitcoin Strategy Profund, you can compare the effects of market volatilities on Cboe Vest and Bitcoin Strategy 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 Cboe Vest with a short position of Bitcoin Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe Vest and Bitcoin Strategy.

Diversification Opportunities for Cboe Vest and Bitcoin Strategy

0.33

Correlation Coefficient

Cboe Vest  Bitcoin Strategy

Weak diversification

The 3 months correlation between Cboe and Bitcoin is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cboe Vest Bitcoin and Bitcoin Strategy Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Strategy Profund and Cboe Vest 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 Cboe Vest Bitcoin are associated (or correlated) with Bitcoin Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Strategy Profund has no effect on the direction of Cboe Vest i.e., Cboe Vest and Bitcoin Strategy go up and down completely randomly.

Pair Corralation between Cboe Vest and Bitcoin Strategy

Assuming the 90 days horizon Cboe Vest Bitcoin is expected to generate 0.71 times more return on investment than Bitcoin Strategy. However, Cboe Vest Bitcoin is 1.41 times less risky than Bitcoin Strategy. It trades about 0.19 of its potential returns per unit of risk. Bitcoin Strategy Profund is currently generating about 0.12 per unit of risk. If you would invest  2,079  in Cboe Vest Bitcoin on February 29, 2024 and sell it today you would earn a total of  211.00  from holding Cboe Vest Bitcoin or generate 10.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Cboe Vest Bitcoin  vs.  Bitcoin Strategy Profund

Cboe Vest Bitcoin

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cboe Vest Bitcoin are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Cboe Vest showed solid returns over the last few months and may actually be approaching a breakup point.

Bitcoin Strategy Profund

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Strategy Profund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Bitcoin Strategy may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Cboe Vest and Bitcoin Strategy

The main advantage of trading using opposite Cboe Vest and Bitcoin Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe Vest position performs unexpectedly, Bitcoin Strategy 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 Bitcoin Strategy will offset losses from the drop in Bitcoin Strategy's long position.

The idea behind Cboe Vest Bitcoin and Bitcoin Strategy Profund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.