Correlation Between Grayscale Bitcoin and Columbia ETF
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Columbia ETF 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 Columbia ETF 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 Columbia ETF Trust, you can compare the effects of market volatilities on Grayscale Bitcoin and Columbia ETF 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 Columbia ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Columbia ETF.
Diversification Opportunities for Grayscale Bitcoin and Columbia ETF
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grayscale and Columbia is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and Columbia ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia ETF Trust 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 Columbia ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia ETF Trust has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Columbia ETF go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Columbia ETF
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 4.73 times more return on investment than Columbia ETF. However, Grayscale Bitcoin is 4.73 times more volatile than Columbia ETF Trust. It trades about 0.1 of its potential returns per unit of risk. Columbia ETF Trust is currently generating about 0.11 per unit of risk. If you would invest 3,943 in Grayscale Bitcoin Trust on November 3, 2024 and sell it today you would earn a total of 4,098 from holding Grayscale Bitcoin Trust or generate 103.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. Columbia ETF Trust
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| Columbia ETF Trust |
Grayscale Bitcoin and Columbia ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Columbia ETF
The main advantage of trading using opposite Grayscale Bitcoin and Columbia ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Columbia ETF 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 Columbia ETF will offset losses from the drop in Columbia ETF's long position.| Grayscale Bitcoin vs. Grayscale Ethereum Trust | Grayscale Bitcoin vs. Riot Blockchain | Grayscale Bitcoin vs. MARA HOLDINGS INC | Grayscale Bitcoin vs. Coinbase Global |
| Columbia ETF vs. Columbia Research Enhanced | Columbia ETF vs. RiverFront Dynamic Flex Cap | Columbia ETF vs. PIMCO RAFI ESG | Columbia ETF vs. DBX ETF Trust |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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