Correlation Between Grayscale Bitcoin and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and IShares MSCI 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 IShares MSCI 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 iShares MSCI USA, you can compare the effects of market volatilities on Grayscale Bitcoin and IShares MSCI 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and IShares MSCI.
Diversification Opportunities for Grayscale Bitcoin and IShares MSCI
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grayscale and IShares is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI USA has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and IShares MSCI go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and IShares MSCI
Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to generate 2.9 times more return on investment than IShares MSCI. However, Grayscale Bitcoin is 2.9 times more volatile than iShares MSCI USA. It trades about 0.2 of its potential returns per unit of risk. iShares MSCI USA is currently generating about 0.12 per unit of risk. If you would invest 2,665 in Grayscale Bitcoin Mini on October 18, 2024 and sell it today you would earn a total of 1,750 from holding Grayscale Bitcoin Mini or generate 65.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Mini vs. iShares MSCI USA
Performance |
| Timeline |
| Grayscale Bitcoin Mini |
| iShares MSCI USA |
Grayscale Bitcoin and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and IShares MSCI
The main advantage of trading using opposite Grayscale Bitcoin and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI'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 |
| IShares MSCI vs. JPMorgan Fundamental Data | IShares MSCI vs. Matthews China Discovery | IShares MSCI vs. Davis Select International | IShares MSCI vs. Dimensional ETF 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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