Correlation Between Grayscale Bitcoin and Fidelity International
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Fidelity International 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 Fidelity International 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 Fidelity International High, you can compare the effects of market volatilities on Grayscale Bitcoin and Fidelity International 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 Fidelity International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Fidelity International.
Diversification Opportunities for Grayscale Bitcoin and Fidelity International
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grayscale and Fidelity is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and Fidelity International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity International 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 Fidelity International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity International has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Fidelity International go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Fidelity International
Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to generate 5.17 times more return on investment than Fidelity International. However, Grayscale Bitcoin is 5.17 times more volatile than Fidelity International High. It trades about 0.38 of its potential returns per unit of risk. Fidelity International High is currently generating about -0.05 per unit of risk. If you would invest 3,105 in Grayscale Bitcoin Mini on September 1, 2024 and sell it today you would earn a total of 1,204 from holding Grayscale Bitcoin Mini or generate 38.78% 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. Fidelity International High
Performance |
| Timeline |
| Grayscale Bitcoin Mini |
| Fidelity International |
Grayscale Bitcoin and Fidelity International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Fidelity International
The main advantage of trading using opposite Grayscale Bitcoin and Fidelity International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Fidelity International 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 Fidelity International will offset losses from the drop in Fidelity International'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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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