Correlation Between Valkyrie Bitcoin and XBTF

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

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

Diversification Opportunities for Valkyrie Bitcoin and XBTF

0.0

Correlation Coefficient

Valkyrie Bitcoin  XBTF

Pay attention - limited upside

The 3 months correlation between Valkyrie and XBTF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Valkyrie Bitcoin Strategy and XBTF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XBTF and Valkyrie 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 Valkyrie Bitcoin Strategy are associated (or correlated) with XBTF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XBTF has no effect on the direction of Valkyrie Bitcoin i.e., Valkyrie Bitcoin and XBTF go up and down completely randomly.

Pair Corralation between Valkyrie Bitcoin and XBTF

If you would invest (100.00) in XBTF on December 1, 2024 and sell it today you would earn a total of  100.00  from holding XBTF or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Valkyrie Bitcoin Strategy  vs.  XBTF

Valkyrie Bitcoin Strategy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Valkyrie Bitcoin Strategy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Etf's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the Exchange Traded Fund stockholders.

XBTF

Risk-Adjusted Performance

Very Weak

Over the last 90 days XBTF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, XBTF is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Valkyrie Bitcoin and XBTF

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

The idea behind Valkyrie Bitcoin Strategy and XBTF 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.