Correlation Between Valkyrie Bitcoin and IShares ESG

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

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

Diversification Opportunities for Valkyrie Bitcoin and IShares ESG

-0.7

Correlation Coefficient

Valkyrie Bitcoin  IShares ESG

Excellent diversification

The 3 months correlation between Valkyrie and IShares is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Valkyrie Bitcoin Strategy and iShares ESG Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Aggregate and Valkyrie Bitcoin 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 Valkyrie Bitcoin Strategy are associated (or correlated) with IShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ESG Aggregate has no effect on the direction of Valkyrie Bitcoin i.e., Valkyrie Bitcoin and IShares ESG go up and down completely randomly.

Pair Corralation between Valkyrie Bitcoin and IShares ESG

Considering the 90-day investment horizon Valkyrie Bitcoin Strategy is expected to generate 11.57 times more return on investment than IShares ESG. However, Valkyrie Bitcoin is 11.57 times more volatile than iShares ESG Aggregate. It trades about 0.19 of its potential returns per unit of risk. iShares ESG Aggregate is currently generating about -0.04 per unit of risk. If you would invest  1,567  in Valkyrie Bitcoin Strategy on August 29, 2024 and sell it today you would earn a total of  797.00  from holding Valkyrie Bitcoin Strategy or generate 50.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Valkyrie Bitcoin Strategy  vs.  iShares ESG Aggregate

Valkyrie Bitcoin Strategy

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Valkyrie Bitcoin Strategy are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Valkyrie Bitcoin reported solid returns over the last few months and may actually be approaching a breakup point.

iShares ESG Aggregate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares ESG Aggregate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, IShares ESG is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Valkyrie Bitcoin and IShares ESG

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

The idea behind Valkyrie Bitcoin Strategy and iShares ESG Aggregate 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.