Correlation Between BetaPro SPTSX and Purpose Bitcoin

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

By analyzing existing cross correlation between BetaPro SPTSX 60 and Purpose Bitcoin Yield, you can compare the effects of market volatilities on BetaPro SPTSX and Purpose 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 BetaPro SPTSX with a short position of Purpose Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SPTSX and Purpose Bitcoin.

Diversification Opportunities for BetaPro SPTSX and Purpose Bitcoin

-0.92

Correlation Coefficient

BetaPro SPTSX  Purpose Bitcoin

Pay attention - limited upside

The 3 months correlation between BetaPro and Purpose is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SPTSX 60 and Purpose Bitcoin Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purpose Bitcoin Yield and BetaPro SPTSX 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 BetaPro SPTSX 60 are associated (or correlated) with Purpose Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purpose Bitcoin Yield has no effect on the direction of BetaPro SPTSX i.e., BetaPro SPTSX and Purpose Bitcoin go up and down completely randomly.

Pair Corralation between BetaPro SPTSX and Purpose Bitcoin

Assuming the 90 days trading horizon BetaPro SPTSX 60 is expected to under-perform the Purpose Bitcoin. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro SPTSX 60 is 3.3 times less risky than Purpose Bitcoin. The etf trades about -0.26 of its potential returns per unit of risk. The Purpose Bitcoin Yield is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  558.00  in Purpose Bitcoin Yield on September 12, 2024 and sell it today you would earn a total of  318.00  from holding Purpose Bitcoin Yield or generate 56.99% return on investment over 90 days.

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

BetaPro SPTSX 60  vs.  Purpose Bitcoin Yield

BetaPro SPTSX 60

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BetaPro SPTSX 60 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Purpose Bitcoin Yield

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Purpose Bitcoin Yield are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Purpose Bitcoin displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BetaPro SPTSX and Purpose Bitcoin

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

The idea behind BetaPro SPTSX 60 and Purpose Bitcoin Yield 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.