Correlation Between VanEck Digital and Valkyrie Bitcoin

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

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

Diversification Opportunities for VanEck Digital and Valkyrie Bitcoin

0.92

Correlation Coefficient

VanEck Digital  Valkyrie Bitcoin

Almost no diversification

The 3 months correlation between VanEck and Valkyrie is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Digital Transformation and Valkyrie Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valkyrie Bitcoin and VanEck Digital 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 VanEck Digital Transformation are associated (or correlated) with Valkyrie Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valkyrie Bitcoin has no effect on the direction of VanEck Digital i.e., VanEck Digital and Valkyrie Bitcoin go up and down completely randomly.

Pair Corralation between VanEck Digital and Valkyrie Bitcoin

Given the investment horizon of 90 days VanEck Digital Transformation is expected to under-perform the Valkyrie Bitcoin. In addition to that, VanEck Digital is 1.55 times more volatile than Valkyrie Bitcoin. It trades about -0.14 of its total potential returns per unit of risk. Valkyrie Bitcoin is currently generating about -0.05 per unit of volatility. If you would invest  2,666  in Valkyrie Bitcoin on December 30, 2024 and sell it today you would lose (298.00) from holding Valkyrie Bitcoin or give up 11.18% of portfolio value over 90 days.

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

VanEck Digital Transformation  vs.  Valkyrie Bitcoin

VanEck Digital Trans

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck Digital Transformation has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Etf's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Valkyrie Bitcoin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Valkyrie Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with VanEck Digital and Valkyrie Bitcoin

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

The idea behind VanEck Digital Transformation and Valkyrie 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.

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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.