Correlation Between SPDR Gold and Valkyrie Bitcoin

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

By analyzing existing cross correlation between SPDR Gold Mini and Valkyrie Bitcoin Miners, you can compare the effects of market volatilities on SPDR Gold and Valkyrie Bitcoin 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 SPDR Gold with a short position of Valkyrie Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and Valkyrie Bitcoin.

Diversification Opportunities for SPDR Gold and Valkyrie Bitcoin

-0.62

Correlation Coefficient

SPDR Gold  Valkyrie Bitcoin

Excellent diversification

The 3 months correlation between SPDR and Valkyrie is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Mini and Valkyrie Bitcoin Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valkyrie Bitcoin Miners and SPDR 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 SPDR Gold Mini are associated (or correlated) with Valkyrie Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valkyrie Bitcoin Miners has no effect on the direction of SPDR Gold i.e., SPDR Gold and Valkyrie Bitcoin go up and down completely randomly.

Pair Corralation between SPDR Gold and Valkyrie Bitcoin

Given the investment horizon of 90 days SPDR Gold Mini is expected to generate about the same return on investment as Valkyrie Bitcoin Miners. But, SPDR Gold Mini is 4.77 times less risky than Valkyrie Bitcoin. It trades about 0.13 of its potential returns per unit of risk. Valkyrie Bitcoin Miners is currently generating about 0.03 per unit of risk. If you would invest  1,539  in Valkyrie Bitcoin Miners on February 10, 2025 and sell it today you would earn a total of  16.00  from holding Valkyrie Bitcoin Miners or generate 1.04% return on investment over 90 days.

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

SPDR Gold Mini  vs.  Valkyrie Bitcoin Miners

SPDR Gold Mini

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Gold Mini are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, SPDR Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Valkyrie Bitcoin Miners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Valkyrie Bitcoin Miners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Etf's primary indicators remain fairly strong which may send shares a bit higher in June 2025. The recent confusion may also be a sign of long-lasting up-swing for the Etf traders.

Pair Trading with SPDR Gold and Valkyrie Bitcoin

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

The idea behind SPDR Gold Mini and Valkyrie Bitcoin Miners 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.