Correlation Between Grayscale Bitcoin and Simplify Exchange
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Simplify Exchange 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 Simplify Exchange 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 Simplify Exchange Traded, you can compare the effects of market volatilities on Grayscale Bitcoin and Simplify Exchange 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 Simplify Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Simplify Exchange.
Diversification Opportunities for Grayscale Bitcoin and Simplify Exchange
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grayscale and Simplify is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and Simplify Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Exchange Traded 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 Simplify Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Exchange Traded has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Simplify Exchange go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Simplify Exchange
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 3.78 times more return on investment than Simplify Exchange. However, Grayscale Bitcoin is 3.78 times more volatile than Simplify Exchange Traded. It trades about 0.17 of its potential returns per unit of risk. Simplify Exchange Traded is currently generating about 0.07 per unit of risk. If you would invest 6,922 in Grayscale Bitcoin Trust on September 12, 2024 and sell it today you would earn a total of 734.00 from holding Grayscale Bitcoin Trust or generate 10.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. Simplify Exchange Traded
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| Simplify Exchange Traded |
Grayscale Bitcoin and Simplify Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Simplify Exchange
The main advantage of trading using opposite Grayscale Bitcoin and Simplify Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Simplify Exchange 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 Simplify Exchange will offset losses from the drop in Simplify Exchange'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 |
| Simplify Exchange vs. Freedom Day Dividend | Simplify Exchange vs. Franklin Templeton ETF | Simplify Exchange vs. iShares MSCI China | Simplify Exchange vs. Tidal Trust II |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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