Correlation Between XBTF and Valkyrie Bitcoin

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

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

Diversification Opportunities for XBTF and Valkyrie Bitcoin

0.54

Correlation Coefficient

XBTF  Valkyrie Bitcoin

Very weak diversification

The 3 months correlation between XBTF and Valkyrie is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding XBTF and Valkyrie Bitcoin Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valkyrie Bitcoin Strategy and XBTF 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 XBTF are associated (or correlated) with Valkyrie Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valkyrie Bitcoin Strategy has no effect on the direction of XBTF i.e., XBTF and Valkyrie Bitcoin go up and down completely randomly.

Pair Corralation between XBTF and Valkyrie Bitcoin

If you would invest  1,116  in Valkyrie Bitcoin Strategy on September 26, 2024 and sell it today you would earn a total of  431.00  from holding Valkyrie Bitcoin Strategy or generate 38.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

XBTF  vs.  Valkyrie Bitcoin Strategy

XBTF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XBTF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, XBTF is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Valkyrie Bitcoin Strategy

Risk-Adjusted Performance

12 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Valkyrie Bitcoin Strategy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Valkyrie Bitcoin reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XBTF and Valkyrie Bitcoin

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

The idea behind XBTF and Valkyrie Bitcoin Strategy 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 Stocks Directory module to find actively traded stocks across global markets.