Correlation Between Bitwise 10 and Osprey Bitcoin

Can any of the company-specific risk be diversified away by investing in both Bitwise 10 and Osprey 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 Bitwise 10 and Osprey Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bitwise 10 Crypto and Osprey Bitcoin Trust, you can compare the effects of market volatilities on Bitwise 10 and Osprey 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 Bitwise 10 with a short position of Osprey Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise 10 and Osprey Bitcoin.

Diversification Opportunities for Bitwise 10 and Osprey Bitcoin

0.97

Correlation Coefficient

Bitwise 10  Osprey Bitcoin

Almost no diversification

The 3 months correlation between Bitwise and Osprey is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise 10 Crypto and Osprey Bitcoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osprey Bitcoin Trust and Bitwise 10 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 10 Crypto are associated (or correlated) with Osprey Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osprey Bitcoin Trust has no effect on the direction of Bitwise 10 i.e., Bitwise 10 and Osprey Bitcoin go up and down completely randomly.

Pair Corralation between Bitwise 10 and Osprey Bitcoin

Given the investment horizon of 90 days Bitwise 10 Crypto is expected to under-perform the Osprey Bitcoin. In addition to that, Bitwise 10 is 1.08 times more volatile than Osprey Bitcoin Trust. It trades about -0.05 of its total potential returns per unit of risk. Osprey Bitcoin Trust is currently generating about -0.03 per unit of volatility. If you would invest  2,900  in Osprey Bitcoin Trust on December 28, 2024 and sell it today you would lose (241.00) from holding Osprey Bitcoin Trust or give up 8.31% of portfolio value over 90 days.

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

Bitwise 10 Crypto  vs.  Osprey Bitcoin Trust

Bitwise 10 Crypto

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bitwise 10 Crypto has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unsteady performance, the Fund's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Osprey Bitcoin Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Osprey Bitcoin Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Osprey Bitcoin is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bitwise 10 and Osprey Bitcoin

The main advantage of trading using opposite Bitwise 10 and Osprey Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitwise 10 position performs unexpectedly, Osprey 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 Osprey Bitcoin will offset losses from the drop in Osprey Bitcoin's long position.

The idea behind Bitwise 10 Crypto and Osprey Bitcoin Trust 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.