Correlation Between Grayscale Bitcoin and Direxion
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Direxion 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 Direxion 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 Direxion, you can compare the effects of market volatilities on Grayscale Bitcoin and Direxion 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 Direxion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Direxion.
Diversification Opportunities for Grayscale Bitcoin and Direxion
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grayscale and Direxion is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and Direxion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion 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 Direxion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Direxion go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Direxion
If you would invest 1,132 in Direxion on September 23, 2024 and sell it today you would earn a total of 0.00 from holding Direxion or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.37% |
| Values | Daily Returns |
Grayscale Bitcoin Mini vs. Direxion
Performance |
| Timeline |
| Grayscale Bitcoin Mini |
| Direxion |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Grayscale Bitcoin and Direxion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Direxion
The main advantage of trading using opposite Grayscale Bitcoin and Direxion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Direxion 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 Direxion will offset losses from the drop in Direxion'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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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