Correlation Between IShares Ethereum and Grayscale Ethereum
Can any of the company-specific risk be diversified away by investing in both IShares Ethereum and Grayscale Ethereum 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 IShares Ethereum and Grayscale Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Ethereum Trust and Grayscale Ethereum Trust, you can compare the effects of market volatilities on IShares Ethereum and Grayscale Ethereum 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 IShares Ethereum with a short position of Grayscale Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Ethereum and Grayscale Ethereum.
Diversification Opportunities for IShares Ethereum and Grayscale Ethereum
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Grayscale is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Ethereum Trust and Grayscale Ethereum Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Ethereum Trust and IShares 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 iShares Ethereum Trust are associated (or correlated) with Grayscale Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Ethereum Trust has no effect on the direction of IShares Ethereum i.e., IShares Ethereum and Grayscale Ethereum go up and down completely randomly.
Pair Corralation between IShares Ethereum and Grayscale Ethereum
Given the investment horizon of 90 days iShares Ethereum Trust is expected to generate 1.01 times more return on investment than Grayscale Ethereum. However, IShares Ethereum is 1.01 times more volatile than Grayscale Ethereum Trust. It trades about 0.28 of its potential returns per unit of risk. Grayscale Ethereum Trust is currently generating about 0.28 per unit of risk. If you would invest 2,013 in iShares Ethereum Trust on August 31, 2024 and sell it today you would earn a total of 747.00 from holding iShares Ethereum Trust or generate 37.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Ethereum Trust vs. Grayscale Ethereum Trust
Performance |
| Timeline |
| iShares Ethereum Trust |
| Grayscale Ethereum Trust |
IShares Ethereum and Grayscale Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Ethereum and Grayscale Ethereum
The main advantage of trading using opposite IShares Ethereum and Grayscale Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Ethereum position performs unexpectedly, Grayscale Ethereum 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 Ethereum will offset losses from the drop in Grayscale Ethereum's long position.| IShares Ethereum vs. Amplify Transformational Data | IShares Ethereum vs. Global X Blockchain | IShares Ethereum vs. VanEck Digital Transformation |
| Grayscale Ethereum vs. Grayscale Bitcoin Trust | Grayscale Ethereum vs. Grayscale Litecoin Trust | Grayscale Ethereum vs. Grayscale Digital Large | Grayscale Ethereum vs. Bitwise 10 Crypto |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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