Correlation Between Grayscale Bitcoin and FlexShares ESG
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and FlexShares ESG 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 FlexShares ESG 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 FlexShares ESG Climate, you can compare the effects of market volatilities on Grayscale Bitcoin and FlexShares ESG 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 FlexShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and FlexShares ESG.
Diversification Opportunities for Grayscale Bitcoin and FlexShares ESG
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grayscale and FlexShares is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and FlexShares ESG Climate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares ESG Climate 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 FlexShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares ESG Climate has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and FlexShares ESG go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and FlexShares ESG
Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to generate 10.72 times more return on investment than FlexShares ESG. However, Grayscale Bitcoin is 10.72 times more volatile than FlexShares ESG Climate. It trades about 0.43 of its potential returns per unit of risk. FlexShares ESG Climate is currently generating about -0.08 per unit of risk. If you would invest 3,030 in Grayscale Bitcoin Mini on August 25, 2024 and sell it today you would earn a total of 1,375 from holding Grayscale Bitcoin Mini or generate 45.38% 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. FlexShares ESG Climate
Performance |
| Timeline |
| Grayscale Bitcoin Mini |
| FlexShares ESG Climate |
Grayscale Bitcoin and FlexShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and FlexShares ESG
The main advantage of trading using opposite Grayscale Bitcoin and FlexShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, FlexShares ESG 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 FlexShares ESG will offset losses from the drop in FlexShares ESG'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 |
| FlexShares ESG vs. iShares ESG Advanced | FlexShares ESG vs. FlexShares ESG Climate | FlexShares ESG vs. FlexShares ESG Climate | FlexShares ESG vs. Franklin Liberty Investment |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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