Correlation Between Bitwise Funds and First Trust

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bitwise Funds and First Trust 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 Bitwise Funds and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitwise Funds Trust and First Trust Exchange Traded, you can compare the effects of market volatilities on Bitwise Funds and First Trust 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 Bitwise Funds with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise Funds and First Trust.

Diversification Opportunities for Bitwise Funds and First Trust

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between Bitwise and First is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise Funds Trust and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange and Bitwise Funds 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 Bitwise Funds Trust are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Exchange has no effect on the direction of Bitwise Funds i.e., Bitwise Funds and First Trust go up and down completely randomly.

Pair Corralation between Bitwise Funds and First Trust

Given the investment horizon of 90 days Bitwise Funds Trust is expected to generate 255.21 times more return on investment than First Trust. However, Bitwise Funds is 255.21 times more volatile than First Trust Exchange Traded. It trades about 0.18 of its potential returns per unit of risk. First Trust Exchange Traded is currently generating about 0.51 per unit of risk. If you would invest  0.00  in Bitwise Funds Trust on April 21, 2025 and sell it today you would earn a total of  4,175  from holding Bitwise Funds Trust or generate 9.223372036854776E16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy51.72%
ValuesDaily Returns

Bitwise Funds Trust  vs.  First Trust Exchange Traded

 Performance 
       Timeline  
Bitwise Funds Trust 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Bitwise Funds Trust are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating primary indicators, Bitwise Funds exhibited solid returns over the last few months and may actually be approaching a breakup point.
First Trust Exchange 

Risk-Adjusted Performance

Excellent

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Exchange Traded are ranked lower than 40 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, First Trust exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bitwise Funds and First Trust Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bitwise Funds and First Trust

The main advantage of trading using opposite Bitwise Funds and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitwise Funds position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.
The idea behind Bitwise Funds Trust and First Trust Exchange Traded 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

Other Complementary Tools

FinTech Suite
Use AI to screen and filter profitable investment opportunities
Equity Valuation
Check real value of public entities based on technical and fundamental data
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Global Correlations
Find global opportunities by holding instruments from different markets
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios