Correlation Between Evolve Cryptocurrencies and 3iQ Bitcoin

Can any of the company-specific risk be diversified away by investing in both Evolve Cryptocurrencies and 3iQ 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 Evolve Cryptocurrencies and 3iQ Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Evolve Cryptocurrencies ETF and 3iQ Bitcoin ETF, you can compare the effects of market volatilities on Evolve Cryptocurrencies and 3iQ 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 Evolve Cryptocurrencies with a short position of 3iQ Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolve Cryptocurrencies and 3iQ Bitcoin.

Diversification Opportunities for Evolve Cryptocurrencies and 3iQ Bitcoin

0.99

Correlation Coefficient

Evolve Cryptocurrencies  3iQ Bitcoin

No risk reduction

The 3 months correlation between Evolve and 3iQ is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Evolve Cryptocurrencies ETF and 3iQ Bitcoin ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3iQ Bitcoin ETF and Evolve Cryptocurrencies 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 Evolve Cryptocurrencies ETF are associated (or correlated) with 3iQ Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3iQ Bitcoin ETF has no effect on the direction of Evolve Cryptocurrencies i.e., Evolve Cryptocurrencies and 3iQ Bitcoin go up and down completely randomly.

Pair Corralation between Evolve Cryptocurrencies and 3iQ Bitcoin

Assuming the 90 days trading horizon Evolve Cryptocurrencies ETF is expected to under-perform the 3iQ Bitcoin. In addition to that, Evolve Cryptocurrencies is 1.03 times more volatile than 3iQ Bitcoin ETF. It trades about -0.09 of its total potential returns per unit of risk. 3iQ Bitcoin ETF is currently generating about -0.05 per unit of volatility. If you would invest  2,146  in 3iQ Bitcoin ETF on December 28, 2024 and sell it today you would lose (252.00) from holding 3iQ Bitcoin ETF or give up 11.74% of portfolio value over 90 days.

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

Evolve Cryptocurrencies ETF  vs.  3iQ Bitcoin ETF

Evolve Cryptocurrencies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evolve Cryptocurrencies ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

3iQ Bitcoin ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days 3iQ Bitcoin ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Evolve Cryptocurrencies and 3iQ Bitcoin

The main advantage of trading using opposite Evolve Cryptocurrencies and 3iQ Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolve Cryptocurrencies position performs unexpectedly, 3iQ 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 3iQ Bitcoin will offset losses from the drop in 3iQ Bitcoin's long position.

The idea behind Evolve Cryptocurrencies ETF and 3iQ Bitcoin ETF 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.