Correlation Between Grayscale Bitcoin and Dimensional World
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Dimensional World 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 Bitcoin and Dimensional World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grayscale Bitcoin Trust and Dimensional World ex, you can compare the effects of market volatilities on Grayscale Bitcoin and Dimensional World 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 Bitcoin with a short position of Dimensional World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Dimensional World.
Diversification Opportunities for Grayscale Bitcoin and Dimensional World
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grayscale and Dimensional is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and Dimensional World ex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional World and Grayscale 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 Grayscale Bitcoin Trust are associated (or correlated) with Dimensional World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional World has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Dimensional World go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Dimensional World
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 4.77 times more return on investment than Dimensional World. However, Grayscale Bitcoin is 4.77 times more volatile than Dimensional World ex. It trades about 0.12 of its potential returns per unit of risk. Dimensional World ex is currently generating about 0.04 per unit of risk. If you would invest 1,189 in Grayscale Bitcoin Trust on October 20, 2024 and sell it today you would earn a total of 7,116 from holding Grayscale Bitcoin Trust or generate 598.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. Dimensional World ex
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| Dimensional World |
Grayscale Bitcoin and Dimensional World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Dimensional World
The main advantage of trading using opposite Grayscale Bitcoin and Dimensional World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Dimensional World 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 Dimensional World will offset losses from the drop in Dimensional World's long position.| Grayscale Bitcoin vs. Grayscale Ethereum Trust | Grayscale Bitcoin vs. Riot Blockchain | Grayscale Bitcoin vs. Marathon Digital Holdings | Grayscale Bitcoin vs. Coinbase Global |
| Dimensional World vs. Dimensional Core Equity | Dimensional World vs. Dimensional Targeted Value | Dimensional World vs. Dimensional International Value | Dimensional World vs. Dimensional Small Cap |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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