Correlation Between Grayscale Bitcoin and Western Asset
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Western Asset 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 Western Asset 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 Western Asset Global, you can compare the effects of market volatilities on Grayscale Bitcoin and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Western Asset.
Diversification Opportunities for Grayscale Bitcoin and Western Asset
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grayscale and Western is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Global has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Western Asset go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Western Asset
Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to under-perform the Western Asset. In addition to that, Grayscale Bitcoin is 16.4 times more volatile than Western Asset Global. It trades about -0.02 of its total potential returns per unit of risk. Western Asset Global is currently generating about 0.0 per unit of volatility. If you would invest 1,169 in Western Asset Global on September 2, 2024 and sell it today you would lose (2.00) from holding Western Asset Global or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Mini vs. Western Asset Global
Performance |
| Timeline |
| Grayscale Bitcoin Mini |
| Western Asset Global |
Grayscale Bitcoin and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Western Asset
The main advantage of trading using opposite Grayscale Bitcoin and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Doubleline Opportunistic Credit |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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