Correlation Between Grayscale Bitcoin and Roundhill Daily
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Roundhill Daily 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 Roundhill Daily 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 Roundhill Daily Inverse, you can compare the effects of market volatilities on Grayscale Bitcoin and Roundhill Daily 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 Roundhill Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Roundhill Daily.
Diversification Opportunities for Grayscale Bitcoin and Roundhill Daily
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grayscale and Roundhill is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and Roundhill Daily Inverse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roundhill Daily Inverse 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 Roundhill Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roundhill Daily Inverse has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Roundhill Daily go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Roundhill Daily
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 2.12 times more return on investment than Roundhill Daily. However, Grayscale Bitcoin is 2.12 times more volatile than Roundhill Daily Inverse. It trades about 0.12 of its potential returns per unit of risk. Roundhill Daily Inverse is currently generating about -0.05 per unit of risk. If you would invest 2,979 in Grayscale Bitcoin Trust on September 14, 2024 and sell it today you would earn a total of 5,098 from holding Grayscale Bitcoin Trust or generate 171.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 71.38% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. Roundhill Daily Inverse
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| Roundhill Daily Inverse |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Grayscale Bitcoin and Roundhill Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Roundhill Daily
The main advantage of trading using opposite Grayscale Bitcoin and Roundhill Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Roundhill Daily 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 Roundhill Daily will offset losses from the drop in Roundhill Daily'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 |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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