Correlation Between BetaPro Inverse and 3iQ Bitcoin

Can any of the company-specific risk be diversified away by investing in both BetaPro Inverse and 3iQ 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 3iQ 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 3iQ Bitcoin ETF, you can compare the effects of market volatilities on BetaPro Inverse and 3iQ 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 3iQ Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro Inverse and 3iQ Bitcoin.

Diversification Opportunities for BetaPro Inverse and 3iQ Bitcoin

-0.99

Correlation Coefficient

BetaPro Inverse  3iQ Bitcoin

Pay attention - limited upside

The 3 months correlation between BetaPro and 3iQ is -0.99. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Inverse Bitcoin and 3iQ Bitcoin ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3iQ 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 3iQ Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3iQ Bitcoin ETF has no effect on the direction of BetaPro Inverse i.e., BetaPro Inverse and 3iQ Bitcoin go up and down completely randomly.

Pair Corralation between BetaPro Inverse and 3iQ Bitcoin

Assuming the 90 days trading horizon BetaPro Inverse Bitcoin is expected to under-perform the 3iQ Bitcoin. In addition to that, BetaPro Inverse is 1.03 times more volatile than 3iQ Bitcoin ETF. It trades about -0.16 of its total potential returns per unit of risk. 3iQ Bitcoin ETF is currently generating about 0.23 per unit of volatility. If you would invest  1,366  in 3iQ Bitcoin ETF on September 23, 2024 and sell it today you would earn a total of  833.00  from holding 3iQ Bitcoin ETF or generate 60.98% return on investment over 90 days.

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

BetaPro Inverse Bitcoin  vs.  3iQ 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.

3iQ Bitcoin ETF

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 3iQ 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, 3iQ Bitcoin displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BetaPro Inverse and 3iQ Bitcoin

The main advantage of trading using opposite BetaPro Inverse and 3iQ Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro Inverse position performs unexpectedly, 3iQ 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 3iQ Bitcoin will offset losses from the drop in 3iQ Bitcoin's long position.

The idea behind BetaPro Inverse Bitcoin and 3iQ 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.