Correlation Between Bitcoin and Guggenheim Large

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

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

Diversification Opportunities for Bitcoin and Guggenheim Large

0.33

Correlation Coefficient

Bitcoin  Guggenheim Large

Weak diversification

The 3 months correlation between Bitcoin and Guggenheim is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Guggenheim Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Large Cap 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 Guggenheim Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Large Cap has no effect on the direction of Bitcoin i.e., Bitcoin and Guggenheim Large go up and down completely randomly.

Pair Corralation between Bitcoin and Guggenheim Large

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the Guggenheim Large. In addition to that, Bitcoin is 3.14 times more volatile than Guggenheim Large Cap. It trades about -0.09 of its total potential returns per unit of risk. Guggenheim Large Cap is currently generating about -0.01 per unit of volatility. If you would invest  3,871  in Guggenheim Large Cap on December 22, 2024 and sell it today you would lose (17.00) from holding Guggenheim Large Cap or give up 0.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.31%
Values	Daily Returns

Bitcoin  vs.  Guggenheim Large Cap

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.

Guggenheim Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guggenheim Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Guggenheim Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bitcoin and Guggenheim Large

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

The idea behind Bitcoin and Guggenheim Large Cap 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.