Correlation Between Bitcoin and Vaneck Vectors

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

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

Diversification Opportunities for Bitcoin and Vaneck Vectors

0.42

Correlation Coefficient

Bitcoin  Vaneck Vectors

Very weak diversification

The 3 months correlation between Bitcoin and Vaneck is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Vaneck Vectors UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaneck Vectors UCITS and Bitcoin 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 Bitcoin are associated (or correlated) with Vaneck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaneck Vectors UCITS has no effect on the direction of Bitcoin i.e., Bitcoin and Vaneck Vectors go up and down completely randomly.

Pair Corralation between Bitcoin and Vaneck Vectors

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the Vaneck Vectors. In addition to that, Bitcoin is 4.95 times more volatile than Vaneck Vectors UCITS. It trades about -0.11 of its total potential returns per unit of risk. Vaneck Vectors UCITS is currently generating about 0.11 per unit of volatility. If you would invest  4,646  in Vaneck Vectors UCITS on October 11, 2024 and sell it today you would earn a total of  48.00  from holding Vaneck Vectors UCITS or generate 1.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.91%
Values	Daily Returns

Bitcoin  vs.  Vaneck Vectors UCITS

Bitcoin

Risk-Adjusted Performance

16 of 100

Solid

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

Vaneck Vectors UCITS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vaneck Vectors UCITS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Vaneck Vectors is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bitcoin and Vaneck Vectors

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

The idea behind Bitcoin and Vaneck Vectors UCITS 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.