Correlation Between Valkyrie Bitcoin and IShares JPX

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

By analyzing existing cross correlation between Valkyrie Bitcoin Miners and iShares JPX Nikkei 400, you can compare the effects of market volatilities on Valkyrie Bitcoin and IShares JPX 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 JPX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valkyrie Bitcoin and IShares JPX.

Diversification Opportunities for Valkyrie Bitcoin and IShares JPX

-0.65

Correlation Coefficient

Valkyrie Bitcoin  IShares JPX

Excellent diversification

The 3 months correlation between Valkyrie and IShares is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Valkyrie Bitcoin Miners and iShares JPX Nikkei 400 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares JPX Nikkei 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 Miners are associated (or correlated) with IShares JPX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares JPX Nikkei has no effect on the direction of Valkyrie Bitcoin i.e., Valkyrie Bitcoin and IShares JPX go up and down completely randomly.

Pair Corralation between Valkyrie Bitcoin and IShares JPX

Given the investment horizon of 90 days Valkyrie Bitcoin Miners is expected to generate 7.37 times more return on investment than IShares JPX. However, Valkyrie Bitcoin is 7.37 times more volatile than iShares JPX Nikkei 400. It trades about 0.26 of its potential returns per unit of risk. iShares JPX Nikkei 400 is currently generating about 0.17 per unit of risk. If you would invest  2,005  in Valkyrie Bitcoin Miners on September 4, 2024 and sell it today you would earn a total of  758.00  from holding Valkyrie Bitcoin Miners or generate 37.81% return on investment over 90 days.

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

Valkyrie Bitcoin Miners  vs.  iShares JPX Nikkei 400

Valkyrie Bitcoin Miners

Risk-Adjusted Performance

15 of 100

Good

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

iShares JPX Nikkei

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares JPX Nikkei 400 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, IShares JPX is not utilizing all of its potentials. The new stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Valkyrie Bitcoin and IShares JPX

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

The idea behind Valkyrie Bitcoin Miners and iShares JPX Nikkei 400 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..