Correlation Between BetaPro Inverse and Fidelity Advantage

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

Diversification Opportunities for BetaPro Inverse and Fidelity Advantage

-0.95

Correlation Coefficient

BetaPro Inverse  Fidelity Advantage

Pay attention - limited upside

The 3 months correlation between BetaPro and Fidelity is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Inverse Bitcoin and Fidelity Advantage Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advantage Ether 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 Fidelity Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advantage Ether has no effect on the direction of BetaPro Inverse i.e., BetaPro Inverse and Fidelity Advantage go up and down completely randomly.

Pair Corralation between BetaPro Inverse and Fidelity Advantage

Assuming the 90 days trading horizon BetaPro Inverse Bitcoin is expected to under-perform the Fidelity Advantage. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro Inverse Bitcoin is 1.23 times less risky than Fidelity Advantage. The etf trades about -0.24 of its potential returns per unit of risk. The Fidelity Advantage Ether is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  4,162  in Fidelity Advantage Ether on September 16, 2024 and sell it today you would earn a total of  3,340  from holding Fidelity Advantage Ether or generate 80.25% 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.  Fidelity Advantage Ether

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.

Fidelity Advantage Ether

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advantage Ether are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Fidelity Advantage displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BetaPro Inverse and Fidelity Advantage

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

The idea behind BetaPro Inverse Bitcoin and Fidelity Advantage Ether 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 Commodity Directory module to find actively traded commodities issued by global exchanges.