Correlation Between Grayscale Bitcoin and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and IShares Trust 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 Trust 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 Trust , you can compare the effects of market volatilities on Grayscale Bitcoin and IShares Trust 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 Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and IShares Trust.
Diversification Opportunities for Grayscale Bitcoin and IShares Trust
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grayscale and IShares is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust 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 Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and IShares Trust go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and IShares Trust
Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to generate 17.56 times more return on investment than IShares Trust. However, Grayscale Bitcoin is 17.56 times more volatile than iShares Trust . It trades about 0.44 of its potential returns per unit of risk. iShares Trust is currently generating about 0.11 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Mini vs. iShares Trust
Performance |
| Timeline |
| Grayscale Bitcoin Mini |
| iShares Trust |
Grayscale Bitcoin and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and IShares Trust
The main advantage of trading using opposite Grayscale Bitcoin and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, IShares Trust 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 Trust will offset losses from the drop in IShares Trust'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 Trust vs. First Trust Senior | IShares Trust vs. First Trust Low | IShares Trust vs. First Trust Enhanced | IShares Trust vs. First Trust TCW |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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