Correlation Between Fidelity Crypto and Valkyrie Bitcoin

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

By analyzing existing cross correlation between Fidelity Crypto Industry and Valkyrie Bitcoin Miners, you can compare the effects of market volatilities on Fidelity Crypto and Valkyrie 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 Fidelity Crypto with a short position of Valkyrie Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Crypto and Valkyrie Bitcoin.

Diversification Opportunities for Fidelity Crypto and Valkyrie Bitcoin

0.99

Correlation Coefficient

Fidelity Crypto  Valkyrie Bitcoin

No risk reduction

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

Pair Corralation between Fidelity Crypto and Valkyrie Bitcoin

Given the investment horizon of 90 days Fidelity Crypto Industry is expected to under-perform the Valkyrie Bitcoin. But the etf apears to be less risky and, when comparing its historical volatility, Fidelity Crypto Industry is 1.26 times less risky than Valkyrie Bitcoin. The etf trades about -0.02 of its potential returns per unit of risk. The Valkyrie Bitcoin Miners is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,579  in Valkyrie Bitcoin Miners on September 22, 2024 and sell it today you would lose (91.00) from holding Valkyrie Bitcoin Miners or give up 3.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.45%
Values	Daily Returns

Fidelity Crypto Industry  vs.  Valkyrie Bitcoin Miners

Fidelity Crypto Industry

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Crypto Industry are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady forward indicators, Fidelity Crypto reported solid returns over the last few months and may actually be approaching a breakup point.

Valkyrie Bitcoin Miners

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Valkyrie Bitcoin Miners are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating primary indicators, Valkyrie Bitcoin demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity Crypto and Valkyrie Bitcoin

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

The idea behind Fidelity Crypto Industry and Valkyrie Bitcoin Miners 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..