Correlation Between Bitcoin Strategy and Short Nasdaq

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

By analyzing existing cross correlation between Bitcoin Strategy Profund and Short Nasdaq 100 Profund, you can compare the effects of market volatilities on Bitcoin Strategy and Short Nasdaq 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 Strategy with a short position of Short Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Strategy and Short Nasdaq.

Diversification Opportunities for Bitcoin Strategy and Short Nasdaq

-0.86

Correlation Coefficient

Bitcoin Strategy  Short Nasdaq

Pay attention - limited upside

The 3 months correlation between Bitcoin and Short is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Strategy Profund and Short Nasdaq 100 Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Nasdaq 100 and Bitcoin Strategy 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 Strategy Profund are associated (or correlated) with Short Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Nasdaq 100 has no effect on the direction of Bitcoin Strategy i.e., Bitcoin Strategy and Short Nasdaq go up and down completely randomly.

Pair Corralation between Bitcoin Strategy and Short Nasdaq

Assuming the 90 days horizon Bitcoin Strategy Profund is expected to under-perform the Short Nasdaq. In addition to that, Bitcoin Strategy is 2.73 times more volatile than Short Nasdaq 100 Profund. It trades about -0.02 of its total potential returns per unit of risk. Short Nasdaq 100 Profund is currently generating about -0.04 per unit of volatility. If you would invest  4,530  in Short Nasdaq 100 Profund on October 1, 2024 and sell it today you would lose (56.00) from holding Short Nasdaq 100 Profund or give up 1.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Bitcoin Strategy Profund  vs.  Short Nasdaq 100 Profund

Bitcoin Strategy Profund

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Strategy Profund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Bitcoin Strategy showed solid returns over the last few months and may actually be approaching a breakup point.

Short Nasdaq 100

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Short Nasdaq 100 Profund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Bitcoin Strategy and Short Nasdaq

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

The idea behind Bitcoin Strategy Profund and Short Nasdaq 100 Profund 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.