Correlation Between Grayscale Bitcoin and IShares Blockchain
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and IShares Blockchain 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 IShares Blockchain 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 iShares Blockchain and, you can compare the effects of market volatilities on Grayscale Bitcoin and IShares Blockchain 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 IShares Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and IShares Blockchain.
Diversification Opportunities for Grayscale Bitcoin and IShares Blockchain
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Grayscale and IShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and iShares Blockchain and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Blockchain and 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 IShares Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Blockchain and has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and IShares Blockchain go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and IShares Blockchain
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 0.66 times more return on investment than IShares Blockchain. However, Grayscale Bitcoin Trust is 1.51 times less risky than IShares Blockchain. It trades about 0.43 of its potential returns per unit of risk. iShares Blockchain and is currently generating about 0.14 per unit of risk. If you would invest 5,364 in Grayscale Bitcoin Trust on August 23, 2024 and sell it today you would earn a total of 2,441 from holding Grayscale Bitcoin Trust or generate 45.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. iShares Blockchain and
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| iShares Blockchain and |
Grayscale Bitcoin and IShares Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and IShares Blockchain
The main advantage of trading using opposite Grayscale Bitcoin and IShares Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, IShares Blockchain 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 IShares Blockchain will offset losses from the drop in IShares Blockchain'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 |
| IShares Blockchain vs. Fidelity Crypto Industry | IShares Blockchain vs. iShares Emergent Food | IShares Blockchain vs. Valkyrie Bitcoin Miners | IShares Blockchain vs. VanEck Digital Transformation |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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