Correlation Between Bitcoin and Amundi ETF

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

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

Diversification Opportunities for Bitcoin and Amundi ETF

0.81

Correlation Coefficient

Bitcoin  Amundi ETF

Very poor diversification

The 3 months correlation between Bitcoin and Amundi is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Amundi ETF PEA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi ETF PEA 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 Amundi ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi ETF PEA has no effect on the direction of Bitcoin i.e., Bitcoin and Amundi ETF go up and down completely randomly.

Pair Corralation between Bitcoin and Amundi ETF

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the Amundi ETF. In addition to that, Bitcoin is 2.44 times more volatile than Amundi ETF PEA. It trades about -0.09 of its total potential returns per unit of risk. Amundi ETF PEA is currently generating about -0.1 per unit of volatility. If you would invest  3,837  in Amundi ETF PEA on December 22, 2024 and sell it today you would lose (242.00) from holding Amundi ETF PEA or give up 6.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.88%
Values	Daily Returns

Bitcoin  vs.  Amundi ETF PEA

Bitcoin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Bitcoin shareholders.

Amundi ETF PEA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amundi ETF PEA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with Bitcoin and Amundi ETF

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

The idea behind Bitcoin and Amundi ETF PEA 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.