Correlation Between Ethereum and Invesco BulletShares

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

By analyzing existing cross correlation between Ethereum and Invesco BulletShares 2028, you can compare the effects of market volatilities on Ethereum and Invesco BulletShares 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 Ethereum with a short position of Invesco BulletShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and Invesco BulletShares.

Diversification Opportunities for Ethereum and Invesco BulletShares

-0.61

Correlation Coefficient

Ethereum  Invesco BulletShares

Excellent diversification

The 3 months correlation between Ethereum and Invesco is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and Invesco BulletShares 2028 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco BulletShares 2028 and Ethereum 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 Ethereum are associated (or correlated) with Invesco BulletShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco BulletShares 2028 has no effect on the direction of Ethereum i.e., Ethereum and Invesco BulletShares go up and down completely randomly.

Pair Corralation between Ethereum and Invesco BulletShares

Assuming the 90 days trading horizon Ethereum is expected to under-perform the Invesco BulletShares. In addition to that, Ethereum is 12.82 times more volatile than Invesco BulletShares 2028. It trades about -0.18 of its total potential returns per unit of risk. Invesco BulletShares 2028 is currently generating about 0.09 per unit of volatility. If you would invest  2,150  in Invesco BulletShares 2028 on December 21, 2024 and sell it today you would earn a total of  35.00  from holding Invesco BulletShares 2028 or generate 1.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.65%
Values	Daily Returns

Ethereum  vs.  Invesco BulletShares 2028

Ethereum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ethereum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Ethereum shareholders.

Invesco BulletShares 2028

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco BulletShares 2028 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking indicators, Invesco BulletShares is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ethereum and Invesco BulletShares

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

The idea behind Ethereum and Invesco BulletShares 2028 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.