Correlation Between Bitcoin ETF and CI Munro

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

By analyzing existing cross correlation between Bitcoin ETF CAD and CI Munro Alternative, you can compare the effects of market volatilities on Bitcoin ETF and CI Munro 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 Bitcoin ETF with a short position of CI Munro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin ETF and CI Munro.

Diversification Opportunities for Bitcoin ETF and CI Munro

0.92

Correlation Coefficient

Bitcoin ETF  CI Munro

Almost no diversification

The 3 months correlation between Bitcoin and CMAG is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin ETF CAD and CI Munro Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Munro Alternative and Bitcoin ETF 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 Bitcoin ETF CAD are associated (or correlated) with CI Munro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Munro Alternative has no effect on the direction of Bitcoin ETF i.e., Bitcoin ETF and CI Munro go up and down completely randomly.

Pair Corralation between Bitcoin ETF and CI Munro

Assuming the 90 days trading horizon Bitcoin ETF CAD is expected to generate 2.78 times more return on investment than CI Munro. However, Bitcoin ETF is 2.78 times more volatile than CI Munro Alternative. It trades about 0.22 of its potential returns per unit of risk. CI Munro Alternative is currently generating about 0.16 per unit of risk. If you would invest  4,470  in Bitcoin ETF CAD on September 13, 2024 and sell it today you would earn a total of  669.00  from holding Bitcoin ETF CAD or generate 14.97% return on investment over 90 days.

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

Bitcoin ETF CAD  vs.  CI Munro Alternative

Bitcoin ETF CAD

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin ETF CAD are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bitcoin ETF displayed solid returns over the last few months and may actually be approaching a breakup point.

CI Munro Alternative

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CI Munro Alternative are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CI Munro may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bitcoin ETF and CI Munro

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

The idea behind Bitcoin ETF CAD and CI Munro Alternative 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.