Correlation Between Bitcoin and JPMORGAN ETFS

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

By analyzing existing cross correlation between Bitcoin and JPMORGAN ETFS ICAV, you can compare the effects of market volatilities on Bitcoin and JPMORGAN ETFS 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 JPMORGAN ETFS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and JPMORGAN ETFS.

Diversification Opportunities for Bitcoin and JPMORGAN ETFS

0.78

Correlation Coefficient

Bitcoin  JPMORGAN ETFS

Poor diversification

The 3 months correlation between Bitcoin and JPMORGAN is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and JPMORGAN ETFS ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMORGAN ETFS ICAV 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 JPMORGAN ETFS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMORGAN ETFS ICAV has no effect on the direction of Bitcoin i.e., Bitcoin and JPMORGAN ETFS go up and down completely randomly.

Pair Corralation between Bitcoin and JPMORGAN ETFS

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the JPMORGAN ETFS. In addition to that, Bitcoin is 3.76 times more volatile than JPMORGAN ETFS ICAV. It trades about -0.11 of its total potential returns per unit of risk. JPMORGAN ETFS ICAV is currently generating about 0.02 per unit of volatility. If you would invest  249,575  in JPMORGAN ETFS ICAV on October 11, 2024 and sell it today you would earn a total of  425.00  from holding JPMORGAN ETFS ICAV or generate 0.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	86.36%
Values	Daily Returns

Bitcoin  vs.  JPMORGAN ETFS ICAV

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.

JPMORGAN ETFS ICAV

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMORGAN ETFS ICAV are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, JPMORGAN ETFS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bitcoin and JPMORGAN ETFS

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

The idea behind Bitcoin and JPMORGAN ETFS ICAV 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.