Correlation Between Bitwise Crypto and Franklin Ethereum

Can any of the company-specific risk be diversified away by investing in both Bitwise Crypto and Franklin Ethereum 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 Bitwise Crypto and Franklin Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bitwise Crypto Industry and Franklin Ethereum ETF, you can compare the effects of market volatilities on Bitwise Crypto and Franklin Ethereum 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 Bitwise Crypto with a short position of Franklin Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise Crypto and Franklin Ethereum.

Diversification Opportunities for Bitwise Crypto and Franklin Ethereum

0.66

Correlation Coefficient

Bitwise Crypto  Franklin Ethereum

Poor diversification

The 3 months correlation between Bitwise and Franklin is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise Crypto Industry and Franklin Ethereum ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Ethereum ETF and Bitwise Crypto 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 Bitwise Crypto Industry are associated (or correlated) with Franklin Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Ethereum ETF has no effect on the direction of Bitwise Crypto i.e., Bitwise Crypto and Franklin Ethereum go up and down completely randomly.

Pair Corralation between Bitwise Crypto and Franklin Ethereum

Given the investment horizon of 90 days Bitwise Crypto Industry is expected to generate 0.87 times more return on investment than Franklin Ethereum. However, Bitwise Crypto Industry is 1.15 times less risky than Franklin Ethereum. It trades about -0.11 of its potential returns per unit of risk. Franklin Ethereum ETF is currently generating about -0.19 per unit of risk. If you would invest  1,718  in Bitwise Crypto Industry on December 30, 2024 and sell it today you would lose (470.00) from holding Bitwise Crypto Industry or give up 27.36% of portfolio value over 90 days.

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

Bitwise Crypto Industry  vs.  Franklin Ethereum ETF

Bitwise Crypto Industry

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bitwise Crypto Industry has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Etf's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Franklin Ethereum ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Franklin Ethereum ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with Bitwise Crypto and Franklin Ethereum

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

The idea behind Bitwise Crypto Industry and Franklin Ethereum 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.