Correlation Between Fidelity Crypto and Valkyrie Bitcoin

Can any of the company-specific risk be diversified away by investing in both Fidelity 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 Fidelity 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 Fidelity Crypto Industry and Valkyrie Bitcoin Miners, you can compare the effects of market volatilities on Fidelity 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 Fidelity Crypto with a short position of Valkyrie Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Crypto and Valkyrie Bitcoin.

Diversification Opportunities for Fidelity Crypto and Valkyrie Bitcoin

0.95

Correlation Coefficient

Fidelity Crypto  Valkyrie Bitcoin

Almost no diversification

The 3 months correlation between Fidelity and Valkyrie is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity 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 Fidelity 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 Fidelity 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 Fidelity Crypto i.e., Fidelity Crypto and Valkyrie Bitcoin go up and down completely randomly.

Pair Corralation between Fidelity Crypto and Valkyrie Bitcoin

Given the investment horizon of 90 days Fidelity Crypto is expected to generate 1.1 times less return on investment than Valkyrie Bitcoin. But when comparing it to its historical volatility, Fidelity Crypto Industry is 1.3 times less risky than Valkyrie Bitcoin. It trades about 0.04 of its potential returns per unit of risk. Valkyrie Bitcoin Miners is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,328  in Valkyrie Bitcoin Miners on February 24, 2024 and sell it today you would earn a total of  384.00  from holding Valkyrie Bitcoin Miners or generate 28.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Fidelity Crypto Industry  vs.  Valkyrie Bitcoin Miners

Fidelity Crypto Industry

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity Crypto Industry has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

Valkyrie Bitcoin Miners

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Valkyrie Bitcoin Miners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's primary indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

Pair Trading with Fidelity Crypto and Valkyrie Bitcoin

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

The idea behind Fidelity Crypto Industry and Valkyrie Bitcoin Miners 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.