Correlation Between SPDR Gold and Bitwise 10

Can any of the company-specific risk be diversified away by investing in both SPDR Gold and Bitwise 10 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 SPDR Gold and Bitwise 10 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPDR Gold Shares and Bitwise 10 Crypto, you can compare the effects of market volatilities on SPDR Gold and Bitwise 10 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 SPDR Gold with a short position of Bitwise 10. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and Bitwise 10.

Diversification Opportunities for SPDR Gold and Bitwise 10

0.31

Correlation Coefficient

SPDR Gold  Bitwise 10

Weak diversification

The 3 months correlation between SPDR and Bitwise is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Shares and Bitwise 10 Crypto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise 10 Crypto and SPDR Gold 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 SPDR Gold Shares are associated (or correlated) with Bitwise 10. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise 10 Crypto has no effect on the direction of SPDR Gold i.e., SPDR Gold and Bitwise 10 go up and down completely randomly.

Pair Corralation between SPDR Gold and Bitwise 10

Considering the 90-day investment horizon SPDR Gold is expected to generate 34.76 times less return on investment than Bitwise 10. But when comparing it to its historical volatility, SPDR Gold Shares is 2.26 times less risky than Bitwise 10. It trades about 0.01 of its potential returns per unit of risk. Bitwise 10 Crypto is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  6,237  in Bitwise 10 Crypto on May 21, 2025 and sell it today you would earn a total of  1,460  from holding Bitwise 10 Crypto or generate 23.41% return on investment over 90 days.

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

SPDR Gold Shares  vs.  Bitwise 10 Crypto

SPDR Gold Shares

Risk-Adjusted Performance

Weak

Over the last 90 days SPDR Gold Shares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, SPDR Gold is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bitwise 10 Crypto

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bitwise 10 Crypto are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady basic indicators, Bitwise 10 showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPDR Gold and Bitwise 10

The main advantage of trading using opposite SPDR Gold and Bitwise 10 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold position performs unexpectedly, Bitwise 10 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 Bitwise 10 will offset losses from the drop in Bitwise 10's long position.

The idea behind SPDR Gold Shares and Bitwise 10 Crypto 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.