Correlation Between Grayscale Bitcoin and MicroSectors Gold
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and MicroSectors Gold 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 MicroSectors Gold 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 MicroSectors Gold 3X, you can compare the effects of market volatilities on Grayscale Bitcoin and MicroSectors Gold 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 MicroSectors Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and MicroSectors Gold.
Diversification Opportunities for Grayscale Bitcoin and MicroSectors Gold
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grayscale and MicroSectors is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and MicroSectors Gold 3X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors Gold 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 MicroSectors Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors Gold has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and MicroSectors Gold go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and MicroSectors Gold
Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to generate 2.29 times more return on investment than MicroSectors Gold. However, Grayscale Bitcoin is 2.29 times more volatile than MicroSectors Gold 3X. It trades about -0.02 of its potential returns per unit of risk. MicroSectors Gold 3X is currently generating about -0.09 per unit of risk. If you would invest 9,156 in Grayscale Bitcoin Mini on August 31, 2024 and sell it today you would lose (4,847) from holding Grayscale Bitcoin Mini or give up 52.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Mini vs. MicroSectors Gold 3X
Performance |
| Timeline |
| Grayscale Bitcoin Mini |
| MicroSectors Gold |
Grayscale Bitcoin and MicroSectors Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and MicroSectors Gold
The main advantage of trading using opposite Grayscale Bitcoin and MicroSectors Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, MicroSectors Gold 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 MicroSectors Gold will offset losses from the drop in MicroSectors Gold'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 |
| MicroSectors Gold vs. Microsectors Gold 3x | MicroSectors Gold vs. Direxion Daily 7 10 | MicroSectors Gold vs. Direxion Daily SP | MicroSectors Gold vs. Direxion Daily FTSE |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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