Correlation Between Ninepoint Bitcoin and Wealthsimple Developed

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

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

Diversification Opportunities for Ninepoint Bitcoin and Wealthsimple Developed

0.77

Correlation Coefficient

Ninepoint Bitcoin  Wealthsimple Developed

Poor diversification

The 3 months correlation between Ninepoint and Wealthsimple is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ninepoint Bitcoin ETF and Wealthsimple Developed Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wealthsimple Developed and Ninepoint 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 Ninepoint Bitcoin ETF are associated (or correlated) with Wealthsimple Developed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wealthsimple Developed has no effect on the direction of Ninepoint Bitcoin i.e., Ninepoint Bitcoin and Wealthsimple Developed go up and down completely randomly.

Pair Corralation between Ninepoint Bitcoin and Wealthsimple Developed

Assuming the 90 days trading horizon Ninepoint Bitcoin ETF is expected to generate 2.27 times more return on investment than Wealthsimple Developed. However, Ninepoint Bitcoin is 2.27 times more volatile than Wealthsimple Developed Markets. It trades about 0.37 of its potential returns per unit of risk. Wealthsimple Developed Markets is currently generating about 0.04 per unit of risk. If you would invest  1,957  in Ninepoint Bitcoin ETF on May 4, 2025 and sell it today you would earn a total of  876.00  from holding Ninepoint Bitcoin ETF or generate 44.76% return on investment over 90 days.

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

Ninepoint Bitcoin ETF  vs.  Wealthsimple Developed Markets

Ninepoint Bitcoin ETF

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Ninepoint Bitcoin ETF are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Ninepoint Bitcoin displayed solid returns over the last few months and may actually be approaching a breakup point.

Wealthsimple Developed

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wealthsimple Developed Markets are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Wealthsimple Developed is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ninepoint Bitcoin and Wealthsimple Developed

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

The idea behind Ninepoint Bitcoin ETF and Wealthsimple Developed Markets 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..