Correlation Between Grayscale Ethereum and DBX ETF
Can any of the company-specific risk be diversified away by investing in both Grayscale Ethereum and DBX ETF 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 Ethereum and DBX ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grayscale Ethereum Mini and DBX ETF Trust, you can compare the effects of market volatilities on Grayscale Ethereum and DBX ETF 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 Ethereum with a short position of DBX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Ethereum and DBX ETF.
Diversification Opportunities for Grayscale Ethereum and DBX ETF
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grayscale and DBX is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Ethereum Mini and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust and Grayscale Ethereum 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 Ethereum Mini are associated (or correlated) with DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of Grayscale Ethereum i.e., Grayscale Ethereum and DBX ETF go up and down completely randomly.
Pair Corralation between Grayscale Ethereum and DBX ETF
Considering the 90-day investment horizon Grayscale Ethereum Mini is expected to generate 5.6 times more return on investment than DBX ETF. However, Grayscale Ethereum is 5.6 times more volatile than DBX ETF Trust. It trades about 0.07 of its potential returns per unit of risk. DBX ETF Trust is currently generating about 0.21 per unit of risk. If you would invest 3,183 in Grayscale Ethereum Mini on October 20, 2024 and sell it today you would earn a total of 136.00 from holding Grayscale Ethereum Mini or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Grayscale Ethereum Mini vs. DBX ETF Trust
Performance |
| Timeline |
| Grayscale Ethereum Mini |
| DBX ETF Trust |
Grayscale Ethereum and DBX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Ethereum and DBX ETF
The main advantage of trading using opposite Grayscale Ethereum and DBX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Ethereum position performs unexpectedly, DBX ETF 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 DBX ETF will offset losses from the drop in DBX ETF's long position.| Grayscale Ethereum vs. ProShares Trust | Grayscale Ethereum vs. iShares Ethereum Trust | Grayscale Ethereum vs. ProShares Trust | Grayscale Ethereum vs. Grayscale Ethereum Trust |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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