Correlation Between Grayscale Ethereum and Vanguard Small

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Grayscale Ethereum and Vanguard Small 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 Vanguard Small 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 Vanguard Small Cap Index, you can compare the effects of market volatilities on Grayscale Ethereum and Vanguard Small 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 Vanguard Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Ethereum and Vanguard Small.

Diversification Opportunities for Grayscale Ethereum and Vanguard Small

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Grayscale and Vanguard is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Ethereum Mini and Vanguard Small Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small Cap 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 Vanguard Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of Grayscale Ethereum i.e., Grayscale Ethereum and Vanguard Small go up and down completely randomly.

Pair Corralation between Grayscale Ethereum and Vanguard Small

Considering the 90-day investment horizon Grayscale Ethereum Mini is expected to under-perform the Vanguard Small. In addition to that, Grayscale Ethereum is 12.51 times more volatile than Vanguard Small Cap Index. It trades about -0.11 of its total potential returns per unit of risk. Vanguard Small Cap Index is currently generating about 0.03 per unit of volatility. If you would invest  25,320  in Vanguard Small Cap Index on September 13, 2024 and sell it today you would earn a total of  119.00  from holding Vanguard Small Cap Index or generate 0.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Grayscale Ethereum Mini  vs.  Vanguard Small Cap Index

 Performance 
       Timeline  
Grayscale Ethereum Mini 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Ethereum Mini are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Grayscale Ethereum may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Vanguard Small Cap 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Small Cap Index are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Vanguard Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Grayscale Ethereum and Vanguard Small Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Grayscale Ethereum and Vanguard Small

The main advantage of trading using opposite Grayscale Ethereum and Vanguard Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Ethereum position performs unexpectedly, Vanguard Small 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 Vanguard Small will offset losses from the drop in Vanguard Small's long position.
The idea behind Grayscale Ethereum Mini and Vanguard Small Cap Index 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.
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Money Managers
Screen money managers from public funds and ETFs managed around the world
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon