Correlation Between Bitcoin and Wasatch Emerging
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Wasatch Emerging 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 Bitcoin and Wasatch Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Wasatch Emerging Markets, you can compare the effects of market volatilities on Bitcoin and Wasatch Emerging 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 Bitcoin with a short position of Wasatch Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Wasatch Emerging.
Diversification Opportunities for Bitcoin and Wasatch Emerging
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bitcoin and Wasatch is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Wasatch Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Emerging Markets and Bitcoin 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 Bitcoin are associated (or correlated) with Wasatch Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Emerging Markets has no effect on the direction of Bitcoin i.e., Bitcoin and Wasatch Emerging go up and down completely randomly.
Pair Corralation between Bitcoin and Wasatch Emerging
Assuming the 90 days trading horizon Bitcoin is expected to generate 3.1 times more return on investment than Wasatch Emerging. However, Bitcoin is 3.1 times more volatile than Wasatch Emerging Markets. It trades about 0.11 of its potential returns per unit of risk. Wasatch Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 2,917,775 in Bitcoin on April 23, 2025 and sell it today you would earn a total of 9,111,725 from holding Bitcoin or generate 312.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.48% |
| Values | Daily Returns |
Bitcoin vs. Wasatch Emerging Markets
Performance |
| Timeline |
| Bitcoin |
| Wasatch Emerging Markets |
Bitcoin and Wasatch Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Wasatch Emerging
The main advantage of trading using opposite Bitcoin and Wasatch Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Wasatch Emerging 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 Wasatch Emerging will offset losses from the drop in Wasatch Emerging's long position.The idea behind Bitcoin and Wasatch Emerging Markets 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.| Wasatch Emerging vs. Wasatch Small Cap | Wasatch Emerging vs. Wasatch Emerging Markets | Wasatch Emerging vs. Wasatch Emerging Markets | Wasatch Emerging vs. Wasatch Global Select |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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