Correlation Between Zillow Group and Bitwise Funds

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

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

Diversification Opportunities for Zillow Group and Bitwise Funds

0.73

Correlation Coefficient

Zillow Group  Bitwise Funds

Poor diversification

The 3 months correlation between Zillow and Bitwise is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Zillow Group Class 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 Zillow Group 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 Zillow Group Class 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 Zillow Group i.e., Zillow Group and Bitwise Funds go up and down completely randomly.

Pair Corralation between Zillow Group and Bitwise Funds

Taking into account the 90-day investment horizon Zillow Group Class is expected to generate 1.29 times more return on investment than Bitwise Funds. However, Zillow Group is 1.29 times more volatile than Bitwise Funds Trust. It trades about 0.21 of its potential returns per unit of risk. Bitwise Funds Trust is currently generating about 0.2 per unit of risk. If you would invest  6,701  in Zillow Group Class on May 27, 2025 and sell it today you would earn a total of  2,043  from holding Zillow Group Class or generate 30.49% return on investment over 90 days.

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

Zillow Group Class  vs.  Bitwise Funds Trust

Zillow Group Class

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zillow Group Class are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Zillow Group showed 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 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Bitwise Funds sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zillow Group and Bitwise Funds

The main advantage of trading using opposite Zillow Group and Bitwise Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zillow Group 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 Zillow Group Class 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.