Correlation Between BetaPro Canadian and Bitcoin ETF

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

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

Diversification Opportunities for BetaPro Canadian and Bitcoin ETF

-0.36

Correlation Coefficient

BetaPro Canadian  Bitcoin ETF

Very good diversification

The 3 months correlation between BetaPro and Bitcoin is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Canadian Gold and Bitcoin ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin ETF and BetaPro Canadian 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 BetaPro Canadian Gold 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 has no effect on the direction of BetaPro Canadian i.e., BetaPro Canadian and Bitcoin ETF go up and down completely randomly.

Pair Corralation between BetaPro Canadian and Bitcoin ETF

Assuming the 90 days trading horizon BetaPro Canadian Gold is expected to under-perform the Bitcoin ETF. In addition to that, BetaPro Canadian is 1.11 times more volatile than Bitcoin ETF. It trades about -0.01 of its total potential returns per unit of risk. Bitcoin ETF is currently generating about 0.28 per unit of volatility. If you would invest  2,105  in Bitcoin ETF on September 15, 2024 and sell it today you would earn a total of  1,518  from holding Bitcoin ETF or generate 72.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

BetaPro Canadian Gold  vs.  Bitcoin ETF

BetaPro Canadian Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BetaPro Canadian Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, BetaPro Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Bitcoin ETF

Risk-Adjusted Performance

22 of 100

Solid

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

Pair Trading with BetaPro Canadian and Bitcoin ETF

The main advantage of trading using opposite BetaPro Canadian and Bitcoin ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro Canadian 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 BetaPro Canadian Gold and Bitcoin ETF 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.