Correlation Between Grayscale Ethereum and Vanguard Extended
Can any of the company-specific risk be diversified away by investing in both Grayscale Ethereum and Vanguard Extended 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 Extended 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 Extended Market, you can compare the effects of market volatilities on Grayscale Ethereum and Vanguard Extended 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 Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Ethereum and Vanguard Extended.
Diversification Opportunities for Grayscale Ethereum and Vanguard Extended
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grayscale and Vanguard is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Ethereum Mini and Vanguard Extended Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Extended Market 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 Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Extended Market has no effect on the direction of Grayscale Ethereum i.e., Grayscale Ethereum and Vanguard Extended go up and down completely randomly.
Pair Corralation between Grayscale Ethereum and Vanguard Extended
Considering the 90-day investment horizon Grayscale Ethereum Mini is expected to generate 3.94 times more return on investment than Vanguard Extended. However, Grayscale Ethereum is 3.94 times more volatile than Vanguard Extended Market. It trades about 0.08 of its potential returns per unit of risk. Vanguard Extended Market is currently generating about 0.05 per unit of risk. If you would invest 2,980 in Grayscale Ethereum Mini on October 19, 2024 and sell it today you would earn a total of 339.00 from holding Grayscale Ethereum Mini or generate 11.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Ethereum Mini vs. Vanguard Extended Market
Performance |
| Timeline |
| Grayscale Ethereum Mini |
| Vanguard Extended Market |
Grayscale Ethereum and Vanguard Extended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Ethereum and Vanguard Extended
The main advantage of trading using opposite Grayscale Ethereum and Vanguard Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Ethereum position performs unexpectedly, Vanguard Extended 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 Extended will offset losses from the drop in Vanguard Extended'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 |
| Vanguard Extended vs. Vanguard Large Cap Index | Vanguard Extended vs. Vanguard Small Cap Growth | Vanguard Extended vs. Vanguard Mid Cap Index | Vanguard Extended vs. Vanguard Mid Cap Growth |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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