Correlation Between Ninepoint Bitcoin and BetaPro Inverse

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

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

Diversification Opportunities for Ninepoint Bitcoin and BetaPro Inverse

-0.96

Correlation Coefficient

Ninepoint Bitcoin  BetaPro Inverse

Pay attention - limited upside

The 3 months correlation between Ninepoint and BetaPro is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding Ninepoint Bitcoin ETF and BetaPro Inverse Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro Inverse Bitcoin and Ninepoint 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 Ninepoint Bitcoin ETF are associated (or correlated) with BetaPro Inverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro Inverse Bitcoin has no effect on the direction of Ninepoint Bitcoin i.e., Ninepoint Bitcoin and BetaPro Inverse go up and down completely randomly.

Pair Corralation between Ninepoint Bitcoin and BetaPro Inverse

Assuming the 90 days trading horizon Ninepoint Bitcoin ETF is expected to under-perform the BetaPro Inverse. But the etf apears to be less risky and, when comparing its historical volatility, Ninepoint Bitcoin ETF is 1.58 times less risky than BetaPro Inverse. The etf trades about 0.0 of its potential returns per unit of risk. The BetaPro Inverse Bitcoin is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,155  in BetaPro Inverse Bitcoin on October 10, 2024 and sell it today you would lose (4.00) from holding BetaPro Inverse Bitcoin or give up 0.19% of portfolio value over 90 days.

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

Ninepoint Bitcoin ETF  vs.  BetaPro Inverse Bitcoin

Ninepoint Bitcoin ETF

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ninepoint Bitcoin ETF are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Ninepoint Bitcoin displayed solid returns over the last few months and may actually be approaching a breakup point.

BetaPro Inverse Bitcoin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BetaPro Inverse Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with Ninepoint Bitcoin and BetaPro Inverse

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

The idea behind Ninepoint Bitcoin ETF and BetaPro Inverse Bitcoin 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.