Correlation Between Harvest Diversified and Bitcoin ETF

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

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

Diversification Opportunities for Harvest Diversified and Bitcoin ETF

0.9

Correlation Coefficient

Harvest Diversified  Bitcoin ETF

Almost no diversification

The 3 months correlation between Harvest and Bitcoin is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Diversified Monthly and Bitcoin ETF CAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin ETF CAD and Harvest Diversified 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 Harvest Diversified Monthly are associated (or correlated) with Bitcoin ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin ETF CAD has no effect on the direction of Harvest Diversified i.e., Harvest Diversified and Bitcoin ETF go up and down completely randomly.

Pair Corralation between Harvest Diversified and Bitcoin ETF

Assuming the 90 days trading horizon Harvest Diversified is expected to generate 6.24 times less return on investment than Bitcoin ETF. But when comparing it to its historical volatility, Harvest Diversified Monthly is 4.76 times less risky than Bitcoin ETF. It trades about 0.22 of its potential returns per unit of risk. Bitcoin ETF CAD is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  2,720  in Bitcoin ETF CAD on September 5, 2024 and sell it today you would earn a total of  2,092  from holding Bitcoin ETF CAD or generate 76.91% return on investment over 90 days.

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

Harvest Diversified Monthly  vs.  Bitcoin ETF CAD

Harvest Diversified

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Diversified Monthly are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Harvest Diversified may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with Harvest Diversified and Bitcoin ETF

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

The idea behind Harvest Diversified Monthly and Bitcoin ETF CAD 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.