Correlation Between Bitcoin ETF and Evolve Enhanced

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

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

Diversification Opportunities for Bitcoin ETF and Evolve Enhanced

-0.29

Correlation Coefficient

Bitcoin ETF  Evolve Enhanced

Very good diversification

The 3 months correlation between Bitcoin and Evolve is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin ETF CAD and Evolve Enhanced Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Enhanced Yield and Bitcoin ETF 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 Bitcoin ETF CAD are associated (or correlated) with Evolve Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Enhanced Yield has no effect on the direction of Bitcoin ETF i.e., Bitcoin ETF and Evolve Enhanced go up and down completely randomly.

Pair Corralation between Bitcoin ETF and Evolve Enhanced

Assuming the 90 days trading horizon Bitcoin ETF CAD is expected to generate 4.74 times more return on investment than Evolve Enhanced. However, Bitcoin ETF is 4.74 times more volatile than Evolve Enhanced Yield. It trades about 0.23 of its potential returns per unit of risk. Evolve Enhanced Yield is currently generating about -0.07 per unit of risk. If you would invest  3,383  in Bitcoin ETF CAD on October 24, 2024 and sell it today you would earn a total of  2,042  from holding Bitcoin ETF CAD or generate 60.36% return on investment over 90 days.

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

Bitcoin ETF CAD  vs.  Evolve Enhanced Yield

Bitcoin ETF CAD

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin ETF CAD are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Bitcoin ETF displayed solid returns over the last few months and may actually be approaching a breakup point.

Evolve Enhanced Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evolve Enhanced Yield has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Evolve Enhanced is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bitcoin ETF and Evolve Enhanced

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

The idea behind Bitcoin ETF CAD and Evolve Enhanced Yield 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.