Correlation Between Franklin Bitcoin and Grayscale Bitcoin
Can any of the company-specific risk be diversified away by investing in both Franklin Bitcoin 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 Franklin Bitcoin and Grayscale Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Bitcoin ETF and Grayscale Bitcoin Trust, you can compare the effects of market volatilities on Franklin Bitcoin 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 Franklin Bitcoin with a short position of Grayscale Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Bitcoin and Grayscale Bitcoin.
Diversification Opportunities for Franklin Bitcoin and Grayscale Bitcoin
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Franklin and Grayscale is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Bitcoin ETF and Grayscale Bitcoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Bitcoin Trust and Franklin Bitcoin 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 Franklin Bitcoin 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 Trust has no effect on the direction of Franklin Bitcoin i.e., Franklin Bitcoin and Grayscale Bitcoin go up and down completely randomly.
Pair Corralation between Franklin Bitcoin and Grayscale Bitcoin
Given the investment horizon of 90 days Franklin Bitcoin ETF is expected to generate 1.0 times more return on investment than Grayscale Bitcoin. However, Franklin Bitcoin ETF is 1.0 times less risky than Grayscale Bitcoin. It trades about 0.49 of its potential returns per unit of risk. Grayscale Bitcoin Trust is currently generating about 0.48 per unit of risk. If you would invest 3,869 in Franklin Bitcoin ETF on August 26, 2024 and sell it today you would earn a total of 1,891 from holding Franklin Bitcoin ETF or generate 48.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Bitcoin ETF vs. Grayscale Bitcoin Trust
Performance |
| Timeline |
| Franklin Bitcoin ETF |
| Grayscale Bitcoin Trust |
Franklin Bitcoin and Grayscale Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Bitcoin and Grayscale Bitcoin
The main advantage of trading using opposite Franklin Bitcoin and Grayscale Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Bitcoin 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.| Franklin Bitcoin vs. ProShares Trust | Franklin Bitcoin vs. iShares Ethereum Trust | Franklin Bitcoin vs. ProShares Trust | Franklin Bitcoin vs. Grayscale Ethereum Trust |
| Grayscale Bitcoin vs. Grayscale Ethereum Trust | Grayscale Bitcoin vs. Riot Blockchain | Grayscale Bitcoin vs. Marathon Digital Holdings | Grayscale Bitcoin vs. Coinbase Global |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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