Correlation Between Grayscale Bitcoin and Schwab Intermediate
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Schwab Intermediate 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 Schwab Intermediate 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 Schwab Intermediate Term Treasury, you can compare the effects of market volatilities on Grayscale Bitcoin and Schwab Intermediate 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 Schwab Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Schwab Intermediate.
Diversification Opportunities for Grayscale Bitcoin and Schwab Intermediate
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grayscale and Schwab is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and Schwab Intermediate Term Treas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Intermediate 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 Schwab Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Intermediate has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Schwab Intermediate go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Schwab Intermediate
Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to generate 14.4 times more return on investment than Schwab Intermediate. However, Grayscale Bitcoin is 14.4 times more volatile than Schwab Intermediate Term Treasury. It trades about 0.33 of its potential returns per unit of risk. Schwab Intermediate Term Treasury is currently generating about 0.05 per unit of risk. If you would invest 3,185 in Grayscale Bitcoin Mini on August 31, 2024 and sell it today you would earn a total of 1,108 from holding Grayscale Bitcoin Mini or generate 34.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Mini vs. Schwab Intermediate Term Treas
Performance |
| Timeline |
| Grayscale Bitcoin Mini |
| Schwab Intermediate |
Grayscale Bitcoin and Schwab Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Schwab Intermediate
The main advantage of trading using opposite Grayscale Bitcoin and Schwab Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Schwab Intermediate 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 Schwab Intermediate will offset losses from the drop in Schwab Intermediate'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 |
| Schwab Intermediate vs. Schwab Short Term Treasury | Schwab Intermediate vs. Schwab International Small Cap | Schwab Intermediate vs. Schwab TIPS ETF | Schwab Intermediate vs. Schwab Aggregate Bond |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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