Correlation Between Bitwise Crypto and Grayscale Digital
Can any of the company-specific risk be diversified away by investing in both Bitwise Crypto and Grayscale Digital 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 Bitwise Crypto and Grayscale Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitwise Crypto Industry and Grayscale Digital Large, you can compare the effects of market volatilities on Bitwise Crypto and Grayscale Digital 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 Bitwise Crypto with a short position of Grayscale Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitwise Crypto and Grayscale Digital.
Diversification Opportunities for Bitwise Crypto and Grayscale Digital
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bitwise and Grayscale is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise Crypto Industry and Grayscale Digital Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Digital Large and Bitwise Crypto 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 Bitwise Crypto Industry are associated (or correlated) with Grayscale Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Digital Large has no effect on the direction of Bitwise Crypto i.e., Bitwise Crypto and Grayscale Digital go up and down completely randomly.
Pair Corralation between Bitwise Crypto and Grayscale Digital
Given the investment horizon of 90 days Bitwise Crypto is expected to generate 1.86 times less return on investment than Grayscale Digital. But when comparing it to its historical volatility, Bitwise Crypto Industry is 1.03 times less risky than Grayscale Digital. It trades about 0.07 of its potential returns per unit of risk. Grayscale Digital Large is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 930.00 in Grayscale Digital Large on September 12, 2024 and sell it today you would earn a total of 3,445 from holding Grayscale Digital Large or generate 370.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitwise Crypto Industry vs. Grayscale Digital Large
Performance |
| Timeline |
| Bitwise Crypto Industry |
| Grayscale Digital Large |
Bitwise Crypto and Grayscale Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitwise Crypto and Grayscale Digital
The main advantage of trading using opposite Bitwise Crypto and Grayscale Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitwise Crypto position performs unexpectedly, Grayscale Digital 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 Digital will offset losses from the drop in Grayscale Digital's long position.| Bitwise Crypto vs. Grayscale Bitcoin Trust | Bitwise Crypto vs. Siren Nasdaq NexGen | Bitwise Crypto vs. First Trust Indxx | Bitwise Crypto vs. Grayscale Bitcoin Mini |
| Grayscale Digital vs. Grayscale Litecoin Trust | Grayscale Digital vs. Grayscale Bitcoin Cash | Grayscale Digital vs. Grayscale Ethereum Trust | Grayscale Digital vs. Bitwise 10 Crypto |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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