Correlation Between Bitwise Funds and First Trust

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 Income, 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

0.65

Correlation Coefficient

Bitwise Funds  First Trust

Poor diversification

The 3 months correlation between Bitwise and First is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise Funds Trust and First Trust Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Income 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 Income 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 is expected to generate 8.01 times less return on investment than First Trust. In addition to that, Bitwise Funds is 4.73 times more volatile than First Trust Income. It trades about 0.01 of its total potential returns per unit of risk. First Trust Income is currently generating about 0.29 per unit of volatility. If you would invest  2,061  in First Trust Income on April 27, 2025 and sell it today you would earn a total of  194.00  from holding First Trust Income or generate 9.41% return on investment over 90 days.

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

Bitwise Funds Trust  vs.  First Trust Income

Bitwise Funds Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bitwise Funds Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bitwise Funds is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

First Trust Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Income are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, First Trust may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 Income 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..