Correlation Between Grayscale Bitcoin and ETF Series
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and ETF 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 ETF 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 ETF Series Solutions, you can compare the effects of market volatilities on Grayscale Bitcoin and ETF 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and ETF Series.
Diversification Opportunities for Grayscale Bitcoin and ETF Series
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grayscale and ETF is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and ETF Series go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and ETF Series
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 3.98 times more return on investment than ETF Series. However, Grayscale Bitcoin is 3.98 times more volatile than ETF Series Solutions. It trades about 0.14 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.05 per unit of risk. If you would invest 786.00 in Grayscale Bitcoin Trust on September 14, 2024 and sell it today you would earn a total of 7,293 from holding Grayscale Bitcoin Trust or generate 927.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 47.27% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. ETF Series Solutions
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| ETF Series Solutions |
Grayscale Bitcoin and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and ETF Series
The main advantage of trading using opposite Grayscale Bitcoin and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, ETF 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 ETF Series will offset losses from the drop in ETF Series' long position.| Grayscale Bitcoin vs. Grayscale Ethereum Trust | Grayscale Bitcoin vs. Riot Blockchain | Grayscale Bitcoin vs. Marathon Digital Holdings | Grayscale Bitcoin vs. Coinbase Global |
| ETF Series vs. SPDR Bloomberg Barclays | ETF Series vs. SPDR SSGA Fixed | ETF Series vs. SPDR DoubleLine Short | ETF Series vs. SPDR Portfolio Corporate |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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