Correlation Between Amundi MSCI and Bitwise Core

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

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

Diversification Opportunities for Amundi MSCI and Bitwise Core

-0.31

Correlation Coefficient

Amundi MSCI  Bitwise Core

Very good diversification

The 3 months correlation between Amundi and Bitwise is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Amundi MSCI Europe and Bitwise Core Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Core Bitcoin and Amundi MSCI 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 Amundi MSCI Europe are associated (or correlated) with Bitwise Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Core Bitcoin has no effect on the direction of Amundi MSCI i.e., Amundi MSCI and Bitwise Core go up and down completely randomly.

Pair Corralation between Amundi MSCI and Bitwise Core

Assuming the 90 days trading horizon Amundi MSCI Europe is expected to under-perform the Bitwise Core. But the etf apears to be less risky and, when comparing its historical volatility, Amundi MSCI Europe is 4.53 times less risky than Bitwise Core. The etf trades about -0.06 of its potential returns per unit of risk. The Bitwise Core Bitcoin is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  565.00  in Bitwise Core Bitcoin on October 8, 2024 and sell it today you would earn a total of  388.00  from holding Bitwise Core Bitcoin or generate 68.67% return on investment over 90 days.

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

Amundi MSCI Europe  vs.  Bitwise Core Bitcoin

Amundi MSCI Europe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi MSCI Europe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Amundi MSCI is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Bitwise Core Bitcoin

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitwise Core Bitcoin are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Bitwise Core exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amundi MSCI and Bitwise Core

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

The idea behind Amundi MSCI Europe and Bitwise Core 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.