Correlation Between Grayscale Bitcoin and RiverFront Strategic
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and RiverFront Strategic 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 RiverFront Strategic 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 RiverFront Strategic Income, you can compare the effects of market volatilities on Grayscale Bitcoin and RiverFront Strategic 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 RiverFront Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and RiverFront Strategic.
Diversification Opportunities for Grayscale Bitcoin and RiverFront Strategic
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grayscale and RiverFront is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and RiverFront Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverFront Strategic 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 RiverFront Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverFront Strategic has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and RiverFront Strategic go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and RiverFront Strategic
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 8.57 times more return on investment than RiverFront Strategic. However, Grayscale Bitcoin is 8.57 times more volatile than RiverFront Strategic Income. It trades about 0.07 of its potential returns per unit of risk. RiverFront Strategic Income is currently generating about 0.08 per unit of risk. If you would invest 6,151 in Grayscale Bitcoin Trust on September 1, 2024 and sell it today you would earn a total of 1,558 from holding Grayscale Bitcoin Trust or generate 25.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. RiverFront Strategic Income
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| RiverFront Strategic |
Grayscale Bitcoin and RiverFront Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and RiverFront Strategic
The main advantage of trading using opposite Grayscale Bitcoin and RiverFront Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, RiverFront Strategic 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 RiverFront Strategic will offset losses from the drop in RiverFront Strategic'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 |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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