Correlation Between BetaPro Inverse and Evolve Cryptocurrencies

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

Diversification Opportunities for BetaPro Inverse and Evolve Cryptocurrencies

-0.99

Correlation Coefficient

BetaPro Inverse  Evolve Cryptocurrencies

Pay attention - limited upside

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

Pair Corralation between BetaPro Inverse and Evolve Cryptocurrencies

Assuming the 90 days trading horizon BetaPro Inverse Bitcoin is expected to under-perform the Evolve Cryptocurrencies. In addition to that, BetaPro Inverse is 1.03 times more volatile than Evolve Cryptocurrencies ETF. It trades about -0.17 of its total potential returns per unit of risk. Evolve Cryptocurrencies ETF is currently generating about 0.22 per unit of volatility. If you would invest  1,404  in Evolve Cryptocurrencies ETF on October 21, 2024 and sell it today you would earn a total of  811.00  from holding Evolve Cryptocurrencies ETF or generate 57.76% 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.  Evolve Cryptocurrencies 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 February 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Evolve Cryptocurrencies

Risk-Adjusted Performance

16 of 100

Solid

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

Pair Trading with BetaPro Inverse and Evolve Cryptocurrencies

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

The idea behind BetaPro Inverse Bitcoin and Evolve Cryptocurrencies 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.