Correlation Between Grayscale Bitcoin and FT Cboe
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and FT Cboe 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 FT Cboe 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 FT Cboe Vest, you can compare the effects of market volatilities on Grayscale Bitcoin and FT Cboe 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 FT Cboe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and FT Cboe.
Diversification Opportunities for Grayscale Bitcoin and FT Cboe
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grayscale and FFEB is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and FT Cboe Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Cboe Vest 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 FT Cboe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Cboe Vest has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and FT Cboe go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and FT Cboe
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 11.03 times more return on investment than FT Cboe. However, Grayscale Bitcoin is 11.03 times more volatile than FT Cboe Vest. It trades about 0.3 of its potential returns per unit of risk. FT Cboe Vest is currently generating about 0.21 per unit of risk. If you would invest 5,538 in Grayscale Bitcoin Trust on August 29, 2024 and sell it today you would earn a total of 1,679 from holding Grayscale Bitcoin Trust or generate 30.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. FT Cboe Vest
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| FT Cboe Vest |
Grayscale Bitcoin and FT Cboe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and FT Cboe
The main advantage of trading using opposite Grayscale Bitcoin and FT Cboe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, FT Cboe 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 FT Cboe will offset losses from the drop in FT Cboe'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 |
| FT Cboe vs. FT Cboe Vest | FT Cboe vs. FT Cboe Vest | FT Cboe vs. FT Cboe Vest | FT Cboe vs. First Trust Exchange Traded |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |