Correlation Between Grayscale Bitcoin and PETROLEOS

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Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and PETROLEOS 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 PETROLEOS 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 PETROLEOS MEXICANOS 65, you can compare the effects of market volatilities on Grayscale Bitcoin and PETROLEOS 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 PETROLEOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and PETROLEOS.

Diversification Opportunities for Grayscale Bitcoin and PETROLEOS

-0.37
  Correlation Coefficient

Very good diversification

The 3 months correlation between Grayscale and PETROLEOS is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and PETROLEOS MEXICANOS 65 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PETROLEOS MEXICANOS 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 PETROLEOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PETROLEOS MEXICANOS has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and PETROLEOS go up and down completely randomly.

Pair Corralation between Grayscale Bitcoin and PETROLEOS

Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to under-perform the PETROLEOS. In addition to that, Grayscale Bitcoin is 3.25 times more volatile than PETROLEOS MEXICANOS 65. It trades about -0.01 of its total potential returns per unit of risk. PETROLEOS MEXICANOS 65 is currently generating about 0.01 per unit of volatility. If you would invest  8,782  in PETROLEOS MEXICANOS 65 on August 31, 2024 and sell it today you would earn a total of  143.00  from holding PETROLEOS MEXICANOS 65 or generate 1.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Grayscale Bitcoin Mini  vs.  PETROLEOS MEXICANOS 65

 Performance 
       Timeline  
Grayscale Bitcoin Mini 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Bitcoin Mini are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Grayscale Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.
PETROLEOS MEXICANOS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PETROLEOS MEXICANOS 65 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for PETROLEOS MEXICANOS 65 investors.

Grayscale Bitcoin and PETROLEOS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Grayscale Bitcoin and PETROLEOS

The main advantage of trading using opposite Grayscale Bitcoin and PETROLEOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, PETROLEOS 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 PETROLEOS will offset losses from the drop in PETROLEOS's long position.
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The idea behind Grayscale Bitcoin Mini and PETROLEOS MEXICANOS 65 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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