Correlation Between Grayscale Bitcoin and American Century
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and American Century 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 American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grayscale Bitcoin Mini and American Century ETF, you can compare the effects of market volatilities on Grayscale Bitcoin and American Century 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 American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and American Century.
Diversification Opportunities for Grayscale Bitcoin and American Century
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grayscale and American is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and American Century ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century ETF 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 Mini are associated (or correlated) with American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century ETF has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and American Century go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and American Century
Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to generate 28.71 times more return on investment than American Century. However, Grayscale Bitcoin is 28.71 times more volatile than American Century ETF. It trades about 0.33 of its potential returns per unit of risk. American Century ETF is currently generating about 0.14 per unit of risk. If you would invest 3,185 in Grayscale Bitcoin Mini on August 31, 2024 and sell it today you would earn a total of 1,108 from holding Grayscale Bitcoin Mini or generate 34.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Mini vs. American Century ETF
Performance |
| Timeline |
| Grayscale Bitcoin Mini |
| American Century ETF |
Grayscale Bitcoin and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and American Century
The main advantage of trading using opposite Grayscale Bitcoin and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Grayscale Bitcoin vs. ProShares Trust | Grayscale Bitcoin vs. iShares Ethereum Trust | Grayscale Bitcoin vs. ProShares Trust | Grayscale Bitcoin vs. Grayscale Ethereum 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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