Correlation Between Grayscale Bitcoin and EA Series
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and EA Series 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 EA Series 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 EA Series Trust, you can compare the effects of market volatilities on Grayscale Bitcoin and EA Series 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 EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and EA Series.
Diversification Opportunities for Grayscale Bitcoin and EA Series
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grayscale and DTAN is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and EA Series go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and EA Series
Given the investment horizon of 90 days Grayscale Bitcoin is expected to generate 17.85 times less return on investment than EA Series. But when comparing it to its historical volatility, Grayscale Bitcoin Trust is 30.01 times less risky than EA Series. It trades about 0.17 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.00 in EA Series Trust on November 3, 2024 and sell it today you would earn a total of 2,582 from holding EA Series Trust or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.0% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. EA Series Trust
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| EA Series Trust |
Grayscale Bitcoin and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and EA Series
The main advantage of trading using opposite Grayscale Bitcoin and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| Grayscale Bitcoin vs. Grayscale Ethereum Trust | Grayscale Bitcoin vs. Riot Blockchain | Grayscale Bitcoin vs. MARA HOLDINGS INC | Grayscale Bitcoin vs. Coinbase Global |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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