Correlation Between Grayscale Bitcoin and JP Morgan
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and JP Morgan 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 JP Morgan 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 JP Morgan Exchange Traded, you can compare the effects of market volatilities on Grayscale Bitcoin and JP Morgan 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 JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and JP Morgan.
Diversification Opportunities for Grayscale Bitcoin and JP Morgan
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grayscale and BBIB is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and JP Morgan Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Exchange 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 JP Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JP Morgan Exchange has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and JP Morgan go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and JP Morgan
Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to under-perform the JP Morgan. In addition to that, Grayscale Bitcoin is 17.0 times more volatile than JP Morgan Exchange Traded. It trades about -0.02 of its total potential returns per unit of risk. JP Morgan Exchange Traded is currently generating about 0.02 per unit of volatility. If you would invest 9,559 in JP Morgan Exchange Traded on August 25, 2024 and sell it today you would earn a total of 126.00 from holding JP Morgan Exchange Traded or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Mini vs. JP Morgan Exchange Traded
Performance |
| Timeline |
| Grayscale Bitcoin Mini |
| JP Morgan Exchange |
Grayscale Bitcoin and JP Morgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and JP Morgan
The main advantage of trading using opposite Grayscale Bitcoin and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, JP Morgan 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 JP Morgan will offset losses from the drop in JP Morgan'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 |
| JP Morgan vs. First Advantage Corp | JP Morgan vs. ATS Corporation | JP Morgan vs. Putnam ETF Trust | JP Morgan vs. US Treasury 30 |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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