Correlation Between Grayscale Ethereum and Coinbase Global
Can any of the company-specific risk be diversified away by investing in both Grayscale Ethereum and Coinbase Global 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 Coinbase Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grayscale Ethereum Trust and Coinbase Global, you can compare the effects of market volatilities on Grayscale Ethereum and Coinbase Global 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 Coinbase Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Ethereum and Coinbase Global.
Diversification Opportunities for Grayscale Ethereum and Coinbase Global
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Grayscale and Coinbase is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Ethereum Trust and Coinbase Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coinbase Global 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 Trust are associated (or correlated) with Coinbase Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coinbase Global has no effect on the direction of Grayscale Ethereum i.e., Grayscale Ethereum and Coinbase Global go up and down completely randomly.
Pair Corralation between Grayscale Ethereum and Coinbase Global
Given the investment horizon of 90 days Grayscale Ethereum is expected to generate 1.34 times less return on investment than Coinbase Global. But when comparing it to its historical volatility, Grayscale Ethereum Trust is 1.15 times less risky than Coinbase Global. It trades about 0.08 of its potential returns per unit of risk. Coinbase Global is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,241 in Coinbase Global on August 27, 2024 and sell it today you would earn a total of 26,223 from holding Coinbase Global or generate 618.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Ethereum Trust vs. Coinbase Global
Performance |
| Timeline |
| Grayscale Ethereum Trust |
| Coinbase Global |
Grayscale Ethereum and Coinbase Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Ethereum and Coinbase Global
The main advantage of trading using opposite Grayscale Ethereum and Coinbase Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Ethereum position performs unexpectedly, Coinbase Global 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 Coinbase Global will offset losses from the drop in Coinbase Global's long position.| Grayscale Ethereum vs. Grayscale Bitcoin Trust | Grayscale Ethereum vs. Grayscale Litecoin Trust | Grayscale Ethereum vs. Grayscale Digital Large | Grayscale Ethereum vs. Bitwise 10 Crypto |
| Coinbase Global vs. Moodys | Coinbase Global vs. MSCI Inc | Coinbase Global vs. Intercontinental Exchange | Coinbase Global vs. CME Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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