Correlation Between Grayscale Bitcoin and IShares Healthcare
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and IShares Healthcare 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 Healthcare 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 Healthcare Providers, you can compare the effects of market volatilities on Grayscale Bitcoin and IShares Healthcare 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 Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and IShares Healthcare.
Diversification Opportunities for Grayscale Bitcoin and IShares Healthcare
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grayscale and IShares is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and iShares Healthcare Providers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Healthcare 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 Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Healthcare has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and IShares Healthcare go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and IShares Healthcare
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 3.07 times more return on investment than IShares Healthcare. However, Grayscale Bitcoin is 3.07 times more volatile than iShares Healthcare Providers. It trades about 0.15 of its potential returns per unit of risk. iShares Healthcare Providers is currently generating about 0.26 per unit of risk. If you would invest 7,632 in Grayscale Bitcoin Trust on October 20, 2024 and sell it today you would earn a total of 673.00 from holding Grayscale Bitcoin Trust or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. iShares Healthcare Providers
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| iShares Healthcare |
Grayscale Bitcoin and IShares Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and IShares Healthcare
The main advantage of trading using opposite Grayscale Bitcoin and IShares Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, IShares Healthcare 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 Healthcare will offset losses from the drop in IShares Healthcare'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 Healthcare vs. iShares Pharmaceuticals ETF | IShares Healthcare vs. iShares Medical Devices | IShares Healthcare vs. iShares Healthcare ETF | IShares Healthcare vs. iShares Broker Dealers Securities |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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