Correlation Between VanEck Ethereum and Grayscale Bitcoin
Can any of the company-specific risk be diversified away by investing in both VanEck Ethereum and Grayscale Bitcoin 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 VanEck Ethereum and Grayscale Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Ethereum ETF and Grayscale Bitcoin Mini, you can compare the effects of market volatilities on VanEck Ethereum and Grayscale Bitcoin 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 VanEck Ethereum with a short position of Grayscale Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Ethereum and Grayscale Bitcoin.
Diversification Opportunities for VanEck Ethereum and Grayscale Bitcoin
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VanEck and Grayscale is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Ethereum ETF and Grayscale Bitcoin Mini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Bitcoin Mini and VanEck 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 VanEck Ethereum ETF are associated (or correlated) with Grayscale Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Bitcoin Mini has no effect on the direction of VanEck Ethereum i.e., VanEck Ethereum and Grayscale Bitcoin go up and down completely randomly.
Pair Corralation between VanEck Ethereum and Grayscale Bitcoin
Given the investment horizon of 90 days VanEck Ethereum ETF is expected to generate 1.33 times more return on investment than Grayscale Bitcoin. However, VanEck Ethereum is 1.33 times more volatile than Grayscale Bitcoin Mini. It trades about 0.03 of its potential returns per unit of risk. Grayscale Bitcoin Mini is currently generating about -0.01 per unit of risk. If you would invest 5,068 in VanEck Ethereum ETF on August 30, 2024 and sell it today you would earn a total of 257.00 from holding VanEck Ethereum ETF or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 18.55% |
| Values | Daily Returns |
VanEck Ethereum ETF vs. Grayscale Bitcoin Mini
Performance |
| Timeline |
| VanEck Ethereum ETF |
| Grayscale Bitcoin Mini |
VanEck Ethereum and Grayscale Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Ethereum and Grayscale Bitcoin
The main advantage of trading using opposite VanEck Ethereum and Grayscale Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Ethereum position performs unexpectedly, Grayscale Bitcoin 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 Bitcoin will offset losses from the drop in Grayscale Bitcoin's long position.| VanEck Ethereum vs. ProShares Trust | VanEck Ethereum vs. iShares Ethereum Trust | VanEck Ethereum vs. ProShares Trust | VanEck Ethereum vs. Grayscale Ethereum Trust |
| Grayscale Bitcoin vs. ProShares Trust | Grayscale Bitcoin vs. iShares Ethereum Trust | Grayscale Bitcoin vs. ProShares Trust | Grayscale Bitcoin 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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