Correlation Between Bitcoin ETF and Fidelity Advantage

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

Diversification Opportunities for Bitcoin ETF and Fidelity Advantage

0.93

Correlation Coefficient

Bitcoin ETF  Fidelity Advantage

Almost no diversification

The 3 months correlation between Bitcoin and Fidelity is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin ETF CAD and Fidelity Advantage Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advantage Ether 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 Fidelity Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advantage Ether has no effect on the direction of Bitcoin ETF i.e., Bitcoin ETF and Fidelity Advantage go up and down completely randomly.

Pair Corralation between Bitcoin ETF and Fidelity Advantage

Assuming the 90 days trading horizon Bitcoin ETF CAD is expected to generate 0.77 times more return on investment than Fidelity Advantage. However, Bitcoin ETF CAD is 1.29 times less risky than Fidelity Advantage. It trades about 0.2 of its potential returns per unit of risk. Fidelity Advantage Ether is currently generating about 0.0 per unit of risk. If you would invest  4,742  in Bitcoin ETF CAD on October 23, 2024 and sell it today you would earn a total of  544.00  from holding Bitcoin ETF CAD or generate 11.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	94.74%
Values	Daily Returns

Bitcoin ETF CAD  vs.  Fidelity Advantage Ether

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.

Fidelity Advantage Ether

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advantage Ether are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fidelity Advantage displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bitcoin ETF and Fidelity Advantage

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

The idea behind Bitcoin ETF CAD and Fidelity Advantage 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..