Correlation Between 3iQ Bitcoin and Bitcoin ETF

Can any of the company-specific risk be diversified away by investing in both 3iQ Bitcoin and Bitcoin 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 3iQ Bitcoin and Bitcoin ETF 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 Bitcoin ETF CAD, you can compare the effects of market volatilities on 3iQ Bitcoin and Bitcoin 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 3iQ Bitcoin with a short position of Bitcoin ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3iQ Bitcoin and Bitcoin ETF.

Diversification Opportunities for 3iQ Bitcoin and Bitcoin ETF

1.0

Correlation Coefficient

3iQ Bitcoin  Bitcoin ETF

No risk reduction

The 3 months correlation between 3iQ and Bitcoin is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding 3iQ Bitcoin ETF and Bitcoin ETF CAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin ETF CAD 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 Bitcoin ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin ETF CAD has no effect on the direction of 3iQ Bitcoin i.e., 3iQ Bitcoin and Bitcoin ETF go up and down completely randomly.

Pair Corralation between 3iQ Bitcoin and Bitcoin ETF

Assuming the 90 days trading horizon 3iQ Bitcoin ETF is expected to generate 0.99 times more return on investment than Bitcoin ETF. However, 3iQ Bitcoin ETF is 1.01 times less risky than Bitcoin ETF. It trades about -0.04 of its potential returns per unit of risk. Bitcoin ETF CAD is currently generating about -0.04 per unit of risk. If you would invest  2,161  in 3iQ Bitcoin ETF on December 27, 2024 and sell it today you would lose (206.00) from holding 3iQ Bitcoin ETF or give up 9.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

3iQ Bitcoin ETF  vs.  Bitcoin ETF CAD

3iQ Bitcoin ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days 3iQ Bitcoin ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Bitcoin ETF CAD

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bitcoin ETF CAD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with 3iQ Bitcoin and Bitcoin ETF

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

The idea behind 3iQ Bitcoin ETF and Bitcoin ETF CAD 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.