Correlation Between VanEck Ethereum and Franklin Bitcoin

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

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

Diversification Opportunities for VanEck Ethereum and Franklin Bitcoin

0.87

Correlation Coefficient

VanEck Ethereum  Franklin Bitcoin

Very poor diversification

The 3 months correlation between VanEck and Franklin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Ethereum ETF and Franklin Bitcoin ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Bitcoin ETF and VanEck 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 VanEck Ethereum ETF are associated (or correlated) with Franklin Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Bitcoin ETF has no effect on the direction of VanEck Ethereum i.e., VanEck Ethereum and Franklin Bitcoin go up and down completely randomly.

Pair Corralation between VanEck Ethereum and Franklin Bitcoin

Given the investment horizon of 90 days VanEck Ethereum ETF is expected to under-perform the Franklin Bitcoin. In addition to that, VanEck Ethereum is 1.55 times more volatile than Franklin Bitcoin ETF. It trades about -0.19 of its total potential returns per unit of risk. Franklin Bitcoin ETF is currently generating about -0.05 per unit of volatility. If you would invest  5,464  in Franklin Bitcoin ETF on December 29, 2024 and sell it today you would lose (609.00) from holding Franklin Bitcoin ETF or give up 11.15% of portfolio value over 90 days.

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

VanEck Ethereum ETF  vs.  Franklin Bitcoin ETF

VanEck Ethereum ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck Ethereum ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's technical indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

Franklin Bitcoin ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Franklin Bitcoin ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with VanEck Ethereum and Franklin Bitcoin

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

The idea behind VanEck Ethereum ETF and Franklin 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..