Correlation Between Grayscale Bitcoin and KraneShares Asia
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and KraneShares Asia 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 KraneShares Asia 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 KraneShares Asia Pacific, you can compare the effects of market volatilities on Grayscale Bitcoin and KraneShares Asia 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 KraneShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and KraneShares Asia.
Diversification Opportunities for Grayscale Bitcoin and KraneShares Asia
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grayscale and KraneShares is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and KraneShares Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Asia Pacific 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 KraneShares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Asia Pacific has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and KraneShares Asia go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and KraneShares Asia
Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to under-perform the KraneShares Asia. In addition to that, Grayscale Bitcoin is 16.96 times more volatile than KraneShares Asia Pacific. It trades about -0.01 of its total potential returns per unit of risk. KraneShares Asia Pacific is currently generating about 0.19 per unit of volatility. If you would invest 2,119 in KraneShares Asia Pacific on September 12, 2024 and sell it today you would earn a total of 369.00 from holding KraneShares Asia Pacific or generate 17.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Mini vs. KraneShares Asia Pacific
Performance |
| Timeline |
| Grayscale Bitcoin Mini |
| KraneShares Asia Pacific |
Grayscale Bitcoin and KraneShares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and KraneShares Asia
The main advantage of trading using opposite Grayscale Bitcoin and KraneShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, KraneShares Asia 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 KraneShares Asia will offset losses from the drop in KraneShares Asia'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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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