Correlation Between China Galaxy and Grayscale Bitcoin
Can any of the company-specific risk be diversified away by investing in both China Galaxy and Grayscale Bitcoin 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 China Galaxy and Grayscale Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Galaxy Securities and Grayscale Bitcoin Cash, you can compare the effects of market volatilities on China Galaxy and Grayscale Bitcoin 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 China Galaxy with a short position of Grayscale Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Galaxy and Grayscale Bitcoin.
Diversification Opportunities for China Galaxy and Grayscale Bitcoin
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Grayscale is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding China Galaxy Securities and Grayscale Bitcoin Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Bitcoin Cash and China Galaxy 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 China Galaxy Securities are associated (or correlated) with Grayscale Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Bitcoin Cash has no effect on the direction of China Galaxy i.e., China Galaxy and Grayscale Bitcoin go up and down completely randomly.
Pair Corralation between China Galaxy and Grayscale Bitcoin
Assuming the 90 days horizon China Galaxy is expected to generate 59.28 times less return on investment than Grayscale Bitcoin. But when comparing it to its historical volatility, China Galaxy Securities is 3.98 times less risky than Grayscale Bitcoin. It trades about 0.01 of its potential returns per unit of risk. Grayscale Bitcoin Cash is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 72.00 in Grayscale Bitcoin Cash on August 27, 2024 and sell it today you would earn a total of 607.00 from holding Grayscale Bitcoin Cash or generate 843.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.44% |
| Values | Daily Returns |
China Galaxy Securities vs. Grayscale Bitcoin Cash
Performance |
| Timeline |
| China Galaxy Securities |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Grayscale Bitcoin Cash |
China Galaxy and Grayscale Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Galaxy and Grayscale Bitcoin
The main advantage of trading using opposite China Galaxy and Grayscale Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Galaxy position performs unexpectedly, Grayscale Bitcoin 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 Grayscale Bitcoin will offset losses from the drop in Grayscale Bitcoin's long position.| China Galaxy vs. Evercore Partners | China Galaxy vs. Lazard | China Galaxy vs. Moelis Co | China Galaxy vs. PJT Partners |
| Grayscale Bitcoin vs. Grayscale Litecoin Trust | Grayscale Bitcoin vs. Grayscale Digital Large | Grayscale Bitcoin vs. Bitwise 10 Crypto | 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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