Correlation Between Grayscale Bitcoin and Grayscale Stellar
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Grayscale Stellar 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 Grayscale Bitcoin and Grayscale Stellar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grayscale Bitcoin Cash and Grayscale Stellar Lumens, you can compare the effects of market volatilities on Grayscale Bitcoin and Grayscale Stellar 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 Grayscale Bitcoin with a short position of Grayscale Stellar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Grayscale Stellar.
Diversification Opportunities for Grayscale Bitcoin and Grayscale Stellar
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grayscale and Grayscale is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Cash and Grayscale Stellar Lumens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Stellar Lumens and Grayscale 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 Grayscale Bitcoin Cash are associated (or correlated) with Grayscale Stellar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Stellar Lumens has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Grayscale Stellar go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Grayscale Stellar
Given the investment horizon of 90 days Grayscale Bitcoin Cash is expected to under-perform the Grayscale Stellar. But the otc stock apears to be less risky and, when comparing its historical volatility, Grayscale Bitcoin Cash is 1.54 times less risky than Grayscale Stellar. The otc stock trades about -0.09 of its potential returns per unit of risk. The Grayscale Stellar Lumens is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,780 in Grayscale Stellar Lumens on October 11, 2024 and sell it today you would earn a total of 2,870 from holding Grayscale Stellar Lumens or generate 161.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Grayscale Bitcoin Cash vs. Grayscale Stellar Lumens
Performance |
| Timeline |
| Grayscale Bitcoin Cash |
| Grayscale Stellar Lumens |
Grayscale Bitcoin and Grayscale Stellar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Grayscale Stellar
The main advantage of trading using opposite Grayscale Bitcoin and Grayscale Stellar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Grayscale Stellar 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 Grayscale Stellar will offset losses from the drop in Grayscale Stellar's long position.| Grayscale Bitcoin vs. Grayscale Litecoin Trust | Grayscale Bitcoin vs. Grayscale Digital Large | Grayscale Bitcoin vs. Bitwise 10 Crypto | Grayscale Bitcoin vs. Grayscale Ethereum Trust |
| Grayscale Stellar vs. Grayscale Zcash Trust | Grayscale Stellar vs. Zencash Investment Trust | Grayscale Stellar vs. Grayscale Bitcoin Cash | Grayscale Stellar vs. Grayscale Litecoin Trust |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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