Correlation Between Microsectors Gold and Bitwise Crypto

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

By analyzing existing cross correlation between Microsectors Gold 3x and Bitwise Crypto Industry, you can compare the effects of market volatilities on Microsectors Gold and Bitwise Crypto 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 Microsectors Gold with a short position of Bitwise Crypto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsectors Gold and Bitwise Crypto.

Diversification Opportunities for Microsectors Gold and Bitwise Crypto

-0.1

Correlation Coefficient

Microsectors Gold  Bitwise Crypto

Good diversification

The 3 months correlation between Microsectors and Bitwise is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Microsectors Gold 3x and Bitwise Crypto Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Crypto Industry and Microsectors 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 Microsectors Gold 3x are associated (or correlated) with Bitwise Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Crypto Industry has no effect on the direction of Microsectors Gold i.e., Microsectors Gold and Bitwise Crypto go up and down completely randomly.

Pair Corralation between Microsectors Gold and Bitwise Crypto

Given the investment horizon of 90 days Microsectors Gold is expected to generate 8.02 times less return on investment than Bitwise Crypto. In addition to that, Microsectors Gold is 1.27 times more volatile than Bitwise Crypto Industry. It trades about 0.02 of its total potential returns per unit of risk. Bitwise Crypto Industry is currently generating about 0.22 per unit of volatility. If you would invest  1,425  in Bitwise Crypto Industry on May 1, 2025 and sell it today you would earn a total of  629.00  from holding Bitwise Crypto Industry or generate 44.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Microsectors Gold 3x  vs.  Bitwise Crypto Industry

Microsectors Gold

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Microsectors Gold 3x are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Microsectors Gold is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Bitwise Crypto Industry

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitwise Crypto Industry are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Bitwise Crypto reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsectors Gold and Bitwise Crypto

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

The idea behind Microsectors Gold 3x and Bitwise Crypto Industry 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.