Correlation Between 3iQ Bitcoin and BetaPro Inverse

Can any of the company-specific risk be diversified away by investing in both 3iQ Bitcoin and BetaPro Inverse 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 3iQ Bitcoin and BetaPro Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 3iQ Bitcoin ETF and BetaPro Inverse Bitcoin, you can compare the effects of market volatilities on 3iQ Bitcoin and BetaPro Inverse 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 3iQ Bitcoin with a short position of BetaPro Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3iQ Bitcoin and BetaPro Inverse.

Diversification Opportunities for 3iQ Bitcoin and BetaPro Inverse

-0.99

Correlation Coefficient

3iQ Bitcoin  BetaPro Inverse

Pay attention - limited upside

The 3 months correlation between 3iQ and BetaPro is -0.99. Overlapping area represents the amount of risk that can be diversified away by holding 3iQ Bitcoin ETF and BetaPro Inverse Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro Inverse Bitcoin and 3iQ 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 3iQ Bitcoin ETF are associated (or correlated) with BetaPro Inverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro Inverse Bitcoin has no effect on the direction of 3iQ Bitcoin i.e., 3iQ Bitcoin and BetaPro Inverse go up and down completely randomly.

Pair Corralation between 3iQ Bitcoin and BetaPro Inverse

Assuming the 90 days trading horizon 3iQ Bitcoin ETF is expected to generate 0.96 times more return on investment than BetaPro Inverse. However, 3iQ Bitcoin ETF is 1.04 times less risky than BetaPro Inverse. It trades about 0.13 of its potential returns per unit of risk. BetaPro Inverse Bitcoin is currently generating about -0.1 per unit of risk. If you would invest  907.00  in 3iQ Bitcoin ETF on September 13, 2024 and sell it today you would earn a total of  1,378  from holding 3iQ Bitcoin ETF or generate 151.93% return on investment over 90 days.

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

3iQ Bitcoin ETF  vs.  BetaPro Inverse Bitcoin

3iQ Bitcoin ETF

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 3iQ Bitcoin ETF are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, 3iQ Bitcoin displayed solid returns over the last few months and may actually be approaching a breakup point.

BetaPro Inverse Bitcoin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BetaPro Inverse Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with 3iQ Bitcoin and BetaPro Inverse

The main advantage of trading using opposite 3iQ Bitcoin and BetaPro Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3iQ Bitcoin position performs unexpectedly, BetaPro Inverse 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 BetaPro Inverse will offset losses from the drop in BetaPro Inverse's long position.

The idea behind 3iQ Bitcoin ETF and BetaPro Inverse Bitcoin 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.