Correlation Between Grayscale Ethereum and VanEck Ethereum
Can any of the company-specific risk be diversified away by investing in both Grayscale Ethereum and VanEck 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 Grayscale Ethereum and VanEck Ethereum 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 VanEck Ethereum ETF, you can compare the effects of market volatilities on Grayscale Ethereum and VanEck 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 Grayscale Ethereum with a short position of VanEck Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Ethereum and VanEck Ethereum.
Diversification Opportunities for Grayscale Ethereum and VanEck Ethereum
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Grayscale and VanEck is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Ethereum Trust and VanEck Ethereum ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Ethereum ETF 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 VanEck Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Ethereum ETF has no effect on the direction of Grayscale Ethereum i.e., Grayscale Ethereum and VanEck Ethereum go up and down completely randomly.
Pair Corralation between Grayscale Ethereum and VanEck Ethereum
Given the investment horizon of 90 days Grayscale Ethereum is expected to generate 1.01 times less return on investment than VanEck Ethereum. But when comparing it to its historical volatility, Grayscale Ethereum Trust is 1.02 times less risky than VanEck Ethereum. It trades about 0.28 of its potential returns per unit of risk. VanEck Ethereum ETF is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,892 in VanEck Ethereum ETF on August 31, 2024 and sell it today you would earn a total of 1,433 from holding VanEck Ethereum ETF or generate 36.82% 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. VanEck Ethereum ETF
Performance |
| Timeline |
| Grayscale Ethereum Trust |
| VanEck Ethereum ETF |
Grayscale Ethereum and VanEck Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Ethereum and VanEck Ethereum
The main advantage of trading using opposite Grayscale Ethereum and VanEck Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Ethereum position performs unexpectedly, VanEck 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 VanEck Ethereum will offset losses from the drop in VanEck Ethereum'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 |
| VanEck Ethereum vs. ProShares Trust | VanEck Ethereum vs. iShares Ethereum Trust | VanEck Ethereum vs. ProShares Trust | VanEck Ethereum vs. Grayscale Ethereum Trust |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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