Correlation Between Grayscale Bitcoin and IShares Edge
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and IShares Edge 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 Edge 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 Edge High, you can compare the effects of market volatilities on Grayscale Bitcoin and IShares Edge 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 Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and IShares Edge.
Diversification Opportunities for Grayscale Bitcoin and IShares Edge
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grayscale and IShares is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and iShares Edge High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Edge High 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 Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Edge High has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and IShares Edge go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and IShares Edge
Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to generate 16.56 times more return on investment than IShares Edge. However, Grayscale Bitcoin is 16.56 times more volatile than iShares Edge High. It trades about 0.32 of its potential returns per unit of risk. iShares Edge High is currently generating about 0.21 per unit of risk. If you would invest 3,220 in Grayscale Bitcoin Mini on August 30, 2024 and sell it today you would earn a total of 1,073 from holding Grayscale Bitcoin Mini or generate 33.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Mini vs. iShares Edge High
Performance |
| Timeline |
| Grayscale Bitcoin Mini |
| iShares Edge High |
Grayscale Bitcoin and IShares Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and IShares Edge
The main advantage of trading using opposite Grayscale Bitcoin and IShares Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, IShares Edge 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 Edge will offset losses from the drop in IShares Edge'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 Edge vs. iShares Edge Investment | IShares Edge vs. iShares Intl High | IShares Edge vs. iShares JP Morgan |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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