Correlation Between Valkyrie Bitcoin and IShares Emergent

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

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

Diversification Opportunities for Valkyrie Bitcoin and IShares Emergent

-0.01

Correlation Coefficient

Valkyrie Bitcoin  IShares Emergent

Good diversification

The 3 months correlation between Valkyrie and IShares is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Valkyrie Bitcoin Miners and iShares Emergent Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Emergent Food and Valkyrie Bitcoin 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 Valkyrie Bitcoin Miners are associated (or correlated) with IShares Emergent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Emergent Food has no effect on the direction of Valkyrie Bitcoin i.e., Valkyrie Bitcoin and IShares Emergent go up and down completely randomly.

Pair Corralation between Valkyrie Bitcoin and IShares Emergent

Given the investment horizon of 90 days Valkyrie Bitcoin Miners is expected to generate 7.13 times more return on investment than IShares Emergent. However, Valkyrie Bitcoin is 7.13 times more volatile than iShares Emergent Food. It trades about 0.0 of its potential returns per unit of risk. iShares Emergent Food is currently generating about -0.22 per unit of risk. 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Valkyrie Bitcoin Miners  vs.  iShares Emergent Food

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.

iShares Emergent Food

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Emergent Food has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, IShares Emergent is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Valkyrie Bitcoin and IShares Emergent

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

The idea behind Valkyrie Bitcoin Miners and iShares Emergent Food 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.