Correlation Between Grayscale Bitcoin and Xtrackers Emerging
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Xtrackers Emerging 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 Xtrackers Emerging 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 Xtrackers Emerging Markets, you can compare the effects of market volatilities on Grayscale Bitcoin and Xtrackers Emerging 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 Xtrackers Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Xtrackers Emerging.
Diversification Opportunities for Grayscale Bitcoin and Xtrackers Emerging
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grayscale and Xtrackers is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and Xtrackers Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Emerging 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 Xtrackers Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Emerging has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Xtrackers Emerging go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Xtrackers Emerging
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 3.37 times more return on investment than Xtrackers Emerging. However, Grayscale Bitcoin is 3.37 times more volatile than Xtrackers Emerging Markets. It trades about 0.3 of its potential returns per unit of risk. Xtrackers Emerging Markets is currently generating about -0.1 per unit of risk. If you would invest 5,248 in Grayscale Bitcoin Trust on September 13, 2024 and sell it today you would earn a total of 2,803 from holding Grayscale Bitcoin Trust or generate 53.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. Xtrackers Emerging Markets
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| Xtrackers Emerging |
Grayscale Bitcoin and Xtrackers Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Xtrackers Emerging
The main advantage of trading using opposite Grayscale Bitcoin and Xtrackers Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Xtrackers Emerging 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 Xtrackers Emerging will offset losses from the drop in Xtrackers Emerging'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 |
| Xtrackers Emerging vs. Global X MSCI | Xtrackers Emerging vs. Global X Alternative | Xtrackers Emerging vs. iShares Emerging Markets | Xtrackers Emerging vs. Global X SuperDividend |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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