Correlation Between Bitwise 10 and Nicholas Fund

Can any of the company-specific risk be diversified away by investing in both Bitwise 10 and Nicholas Fund 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 10 and Nicholas Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bitwise 10 Crypto and Nicholas Fund Inc, you can compare the effects of market volatilities on Bitwise 10 and Nicholas Fund 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 10 with a short position of Nicholas Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise 10 and Nicholas Fund.

Diversification Opportunities for Bitwise 10 and Nicholas Fund

0.93

Correlation Coefficient

Bitwise 10  Nicholas Fund

Almost no diversification

The 3 months correlation between Bitwise and Nicholas is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise 10 Crypto and Nicholas Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicholas Fund and Bitwise 10 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 10 Crypto are associated (or correlated) with Nicholas Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicholas Fund has no effect on the direction of Bitwise 10 i.e., Bitwise 10 and Nicholas Fund go up and down completely randomly.

Pair Corralation between Bitwise 10 and Nicholas Fund

Given the investment horizon of 90 days Bitwise 10 Crypto is expected to generate 5.11 times more return on investment than Nicholas Fund. However, Bitwise 10 is 5.11 times more volatile than Nicholas Fund Inc. It trades about 0.4 of its potential returns per unit of risk. Nicholas Fund Inc is currently generating about 0.12 per unit of risk. If you would invest  2,682  in Bitwise 10 Crypto on September 16, 2024 and sell it today you would earn a total of  3,889  from holding Bitwise 10 Crypto or generate 145.0% return on investment over 90 days.

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

Bitwise 10 Crypto  vs.  Nicholas Fund Inc

Bitwise 10 Crypto

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Bitwise 10 Crypto are ranked lower than 31 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady basic indicators, Bitwise 10 showed solid returns over the last few months and may actually be approaching a breakup point.

Nicholas Fund

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nicholas Fund Inc are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nicholas Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bitwise 10 and Nicholas Fund

The main advantage of trading using opposite Bitwise 10 and Nicholas Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitwise 10 position performs unexpectedly, Nicholas Fund 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 Nicholas Fund will offset losses from the drop in Nicholas Fund's long position.

The idea behind Bitwise 10 Crypto and Nicholas Fund Inc 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.