Correlation Between Grayscale Bitcoin and Bitwise Crypto
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Bitwise Crypto 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 Bitwise Crypto 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 Bitwise Crypto Industry, you can compare the effects of market volatilities on Grayscale Bitcoin and Bitwise Crypto 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 Bitwise Crypto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Bitwise Crypto.
Diversification Opportunities for Grayscale Bitcoin and Bitwise Crypto
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Grayscale and Bitwise is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and Bitwise Crypto Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Crypto Industry 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 Bitwise Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Crypto Industry has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Bitwise Crypto go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Bitwise Crypto
Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to under-perform the Bitwise Crypto. But the etf apears to be less risky and, when comparing its historical volatility, Grayscale Bitcoin Mini is 1.23 times less risky than Bitwise Crypto. The etf trades about -0.01 of its potential returns per unit of risk. The Bitwise Crypto Industry is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 392.00 in Bitwise Crypto Industry on August 30, 2024 and sell it today you would earn a total of 1,678 from holding Bitwise Crypto Industry or generate 428.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Mini vs. Bitwise Crypto Industry
Performance |
| Timeline |
| Grayscale Bitcoin Mini |
| Bitwise Crypto Industry |
Grayscale Bitcoin and Bitwise Crypto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Bitwise Crypto
The main advantage of trading using opposite Grayscale Bitcoin and Bitwise Crypto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Bitwise Crypto 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 Bitwise Crypto will offset losses from the drop in Bitwise Crypto'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 |
| Bitwise Crypto vs. Bitwise 10 Crypto | Bitwise Crypto vs. VanEck Digital Transformation | Bitwise Crypto vs. Global X Blockchain | Bitwise Crypto vs. First Trust Indxx |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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