Correlation Between Bitcoin and SPDR SSGA

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

By analyzing existing cross correlation between Bitcoin and SPDR SSGA My2028, you can compare the effects of market volatilities on Bitcoin and SPDR SSGA 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 SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and SPDR SSGA.

Diversification Opportunities for Bitcoin and SPDR SSGA

0.0

Correlation Coefficient

Bitcoin  SPDR SSGA

Pay attention - limited upside

The 3 months correlation between Bitcoin and SPDR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and SPDR SSGA My2028 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA My2028 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 SPDR SSGA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSGA My2028 has no effect on the direction of Bitcoin i.e., Bitcoin and SPDR SSGA go up and down completely randomly.

Pair Corralation between Bitcoin and SPDR SSGA

Assuming the 90 days trading horizon Bitcoin is expected to generate 17.89 times more return on investment than SPDR SSGA. However, Bitcoin is 17.89 times more volatile than SPDR SSGA My2028. It trades about 0.11 of its potential returns per unit of risk. SPDR SSGA My2028 is currently generating about -0.27 per unit of risk. If you would invest  9,665,788  in Bitcoin on October 9, 2024 and sell it today you would earn a total of  557,212  from holding Bitcoin or generate 5.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Bitcoin  vs.  SPDR SSGA My2028

Bitcoin

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 20 (%) 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.

SPDR SSGA My2028

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPDR SSGA My2028 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, SPDR SSGA is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bitcoin and SPDR SSGA

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

The idea behind Bitcoin and SPDR SSGA My2028 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.