Correlation Between Siren Nasdaq and Invesco Galaxy

Can any of the company-specific risk be diversified away by investing in both Siren Nasdaq and Invesco Galaxy 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 Siren Nasdaq and Invesco Galaxy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Siren Nasdaq NexGen and Invesco Galaxy Bitcoin, you can compare the effects of market volatilities on Siren Nasdaq and Invesco Galaxy 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 Siren Nasdaq with a short position of Invesco Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siren Nasdaq and Invesco Galaxy.

Diversification Opportunities for Siren Nasdaq and Invesco Galaxy

0.91

Correlation Coefficient

Siren Nasdaq  Invesco Galaxy

Almost no diversification

The 3 months correlation between Siren and Invesco is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Siren Nasdaq NexGen and Invesco Galaxy Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Galaxy Bitcoin and Siren Nasdaq 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 Siren Nasdaq NexGen are associated (or correlated) with Invesco Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Galaxy Bitcoin has no effect on the direction of Siren Nasdaq i.e., Siren Nasdaq and Invesco Galaxy go up and down completely randomly.

Pair Corralation between Siren Nasdaq and Invesco Galaxy

Given the investment horizon of 90 days Siren Nasdaq NexGen is expected to under-perform the Invesco Galaxy. But the etf apears to be less risky and, when comparing its historical volatility, Siren Nasdaq NexGen is 1.21 times less risky than Invesco Galaxy. The etf trades about -0.18 of its potential returns per unit of risk. The Invesco Galaxy Bitcoin is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  9,423  in Invesco Galaxy Bitcoin on December 28, 2024 and sell it today you would lose (1,052) from holding Invesco Galaxy Bitcoin or give up 11.16% of portfolio value over 90 days.

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

Siren Nasdaq NexGen  vs.  Invesco Galaxy Bitcoin

Siren Nasdaq NexGen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siren Nasdaq NexGen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Etf's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Invesco Galaxy Bitcoin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco Galaxy Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Siren Nasdaq and Invesco Galaxy

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

The idea behind Siren Nasdaq NexGen and Invesco Galaxy Bitcoin 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..