Correlation Between NBI Unconstrained and Bitcoin ETF

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

By analyzing existing cross correlation between NBI Unconstrained Fixed and Bitcoin ETF CAD, you can compare the effects of market volatilities on NBI Unconstrained and Bitcoin ETF 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 NBI Unconstrained with a short position of Bitcoin ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Unconstrained and Bitcoin ETF.

Diversification Opportunities for NBI Unconstrained and Bitcoin ETF

0.72

Correlation Coefficient

NBI Unconstrained  Bitcoin ETF

Poor diversification

The 3 months correlation between NBI and Bitcoin is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding NBI Unconstrained Fixed and Bitcoin ETF CAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin ETF CAD and NBI Unconstrained 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 NBI Unconstrained Fixed are associated (or correlated) with Bitcoin ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin ETF CAD has no effect on the direction of NBI Unconstrained i.e., NBI Unconstrained and Bitcoin ETF go up and down completely randomly.

Pair Corralation between NBI Unconstrained and Bitcoin ETF

Assuming the 90 days trading horizon NBI Unconstrained is expected to generate 8.68 times less return on investment than Bitcoin ETF. But when comparing it to its historical volatility, NBI Unconstrained Fixed is 5.68 times less risky than Bitcoin ETF. It trades about 0.15 of its potential returns per unit of risk. Bitcoin ETF CAD is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  4,295  in Bitcoin ETF CAD on April 20, 2025 and sell it today you would earn a total of  1,413  from holding Bitcoin ETF CAD or generate 32.9% return on investment over 90 days.

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

NBI Unconstrained Fixed  vs.  Bitcoin ETF CAD

NBI Unconstrained Fixed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NBI Unconstrained Fixed are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, NBI Unconstrained is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Bitcoin ETF CAD

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin ETF CAD are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bitcoin ETF displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NBI Unconstrained and Bitcoin ETF

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

The idea behind NBI Unconstrained Fixed and Bitcoin ETF CAD 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.