Correlation Between 3iQ Bitcoin and 3iQ CoinShares

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

Diversification Opportunities for 3iQ Bitcoin and 3iQ CoinShares

0.87

Correlation Coefficient

3iQ Bitcoin  3iQ CoinShares

Very poor diversification

The 3 months correlation between 3iQ and 3iQ is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding 3iQ Bitcoin ETF and 3iQ CoinShares Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3iQ CoinShares Ether 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 3iQ CoinShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3iQ CoinShares Ether has no effect on the direction of 3iQ Bitcoin i.e., 3iQ Bitcoin and 3iQ CoinShares go up and down completely randomly.

Pair Corralation between 3iQ Bitcoin and 3iQ CoinShares

Assuming the 90 days trading horizon 3iQ Bitcoin ETF is expected to generate 0.63 times more return on investment than 3iQ CoinShares. However, 3iQ Bitcoin ETF is 1.58 times less risky than 3iQ CoinShares. It trades about -0.05 of its potential returns per unit of risk. 3iQ CoinShares Ether is currently generating about -0.18 per unit of risk. If you would invest  2,146  in 3iQ Bitcoin ETF on December 29, 2024 and sell it today you would lose (252.00) from holding 3iQ Bitcoin ETF or give up 11.74% of portfolio value over 90 days.

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

3iQ Bitcoin ETF  vs.  3iQ CoinShares Ether

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.

3iQ CoinShares Ether

Risk-Adjusted Performance

Very Weak

Over the last 90 days 3iQ CoinShares Ether 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 April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with 3iQ Bitcoin and 3iQ CoinShares

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

The idea behind 3iQ Bitcoin ETF and 3iQ CoinShares Ether 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.