Correlation Between Vanguard Small and Bitwise Funds

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

By analyzing existing cross correlation between Vanguard Small Cap Growth and Bitwise Funds Trust, you can compare the effects of market volatilities on Vanguard Small and Bitwise Funds 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 Vanguard Small with a short position of Bitwise Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small and Bitwise Funds.

Diversification Opportunities for Vanguard Small and Bitwise Funds

-0.11

Correlation Coefficient

Vanguard Small  Bitwise Funds

Good diversification

The 3 months correlation between Vanguard and Bitwise is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Growth and Bitwise Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Funds Trust and Vanguard Small 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 Vanguard Small Cap Growth are associated (or correlated) with Bitwise Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Funds Trust has no effect on the direction of Vanguard Small i.e., Vanguard Small and Bitwise Funds go up and down completely randomly.

Pair Corralation between Vanguard Small and Bitwise Funds

Considering the 90-day investment horizon Vanguard Small is expected to generate 612.79 times less return on investment than Bitwise Funds. But when comparing it to its historical volatility, Vanguard Small Cap Growth is 130.53 times less risky than Bitwise Funds. It trades about 0.04 of its potential returns per unit of risk. Bitwise Funds Trust is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Bitwise Funds Trust on April 24, 2025 and sell it today you would earn a total of  4,291  from holding Bitwise Funds Trust or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	6.29%
Values	Daily Returns

Vanguard Small Cap Growth  vs.  Bitwise Funds Trust

Vanguard Small Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Small Cap Growth are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain fundamental drivers, Vanguard Small disclosed solid returns over the last few months and may actually be approaching a breakup point.

Bitwise Funds Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bitwise Funds Trust are ranked lower than 13 (%) 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.

Pair Trading with Vanguard Small and Bitwise Funds

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

The idea behind Vanguard Small Cap Growth and Bitwise Funds Trust 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.