Correlation Between 3iQ Bitcoin and Brompton European

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

Diversification Opportunities for 3iQ Bitcoin and Brompton European

-0.61

Correlation Coefficient

3iQ Bitcoin  Brompton European

Excellent diversification

The 3 months correlation between 3iQ and Brompton is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding 3iQ Bitcoin ETF and Brompton European Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton European 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 Brompton European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton European has no effect on the direction of 3iQ Bitcoin i.e., 3iQ Bitcoin and Brompton European go up and down completely randomly.

Pair Corralation between 3iQ Bitcoin and Brompton European

Assuming the 90 days trading horizon 3iQ Bitcoin ETF is expected to under-perform the Brompton European. In addition to that, 3iQ Bitcoin is 2.74 times more volatile than Brompton European Dividend. It trades about -0.05 of its total potential returns per unit of risk. Brompton European Dividend is currently generating about 0.11 per unit of volatility. If you would invest  1,031  in Brompton European Dividend on December 30, 2024 and sell it today you would earn a total of  74.00  from holding Brompton European Dividend or generate 7.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

3iQ Bitcoin ETF  vs.  Brompton European Dividend

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.

Brompton European

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brompton European Dividend are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Brompton European may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with 3iQ Bitcoin and Brompton European

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

The idea behind 3iQ Bitcoin ETF and Brompton European Dividend 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.