Correlation Between BetaPro Inverse and Ninepoint Bitcoin

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

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

Diversification Opportunities for BetaPro Inverse and Ninepoint Bitcoin

-0.96

Correlation Coefficient

BetaPro Inverse  Ninepoint Bitcoin

Pay attention - limited upside

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

Pair Corralation between BetaPro Inverse and Ninepoint Bitcoin

Assuming the 90 days trading horizon BetaPro Inverse Bitcoin is expected to under-perform the Ninepoint Bitcoin. In addition to that, BetaPro Inverse is 1.16 times more volatile than Ninepoint Bitcoin ETF. It trades about -0.23 of its total potential returns per unit of risk. Ninepoint Bitcoin ETF is currently generating about 0.24 per unit of volatility. If you would invest  1,681  in Ninepoint Bitcoin ETF on September 14, 2024 and sell it today you would earn a total of  872.00  from holding Ninepoint Bitcoin ETF or generate 51.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

BetaPro Inverse Bitcoin  vs.  Ninepoint Bitcoin ETF

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 January 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Ninepoint Bitcoin ETF

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ninepoint Bitcoin ETF are ranked lower than 18 (%) 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.

Pair Trading with BetaPro Inverse and Ninepoint Bitcoin

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

The idea behind BetaPro Inverse Bitcoin and Ninepoint 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.