Correlation Between Grayscale Bitcoin and T REX
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and T REX 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 T REX 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 T REX 2X Long, you can compare the effects of market volatilities on Grayscale Bitcoin and T REX 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 T REX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and T REX.
Diversification Opportunities for Grayscale Bitcoin and T REX
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grayscale and MSTU is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and T REX 2X Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T REX 2X 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 T REX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T REX 2X has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and T REX go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and T REX
Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to generate 0.25 times more return on investment than T REX. However, Grayscale Bitcoin Mini is 3.98 times less risky than T REX. It trades about -0.09 of its potential returns per unit of risk. T REX 2X Long is currently generating about -0.07 per unit of risk. If you would invest 4,175 in Grayscale Bitcoin Mini on November 30, 2024 and sell it today you would lose (442.00) from holding Grayscale Bitcoin Mini or give up 10.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Mini vs. T REX 2X Long
Performance |
| Timeline |
| Grayscale Bitcoin Mini |
| T REX 2X |
Grayscale Bitcoin and T REX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and T REX
The main advantage of trading using opposite Grayscale Bitcoin and T REX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, T REX 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 T REX will offset losses from the drop in T REX's long position.| Grayscale Bitcoin vs. Grayscale Funds Trust | Grayscale Bitcoin vs. ProShares Trust | Grayscale Bitcoin vs. iShares Ethereum Trust | Grayscale Bitcoin vs. ProShares Trust |
| T REX vs. Strategy Shares | T REX vs. Freedom Day Dividend | T REX vs. Franklin Templeton ETF | T REX vs. iShares MSCI China |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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