Correlation Between Grayscale Bitcoin and VanEck Steel
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and VanEck Steel 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 VanEck Steel 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 VanEck Steel ETF, you can compare the effects of market volatilities on Grayscale Bitcoin and VanEck Steel 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 VanEck Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and VanEck Steel.
Diversification Opportunities for Grayscale Bitcoin and VanEck Steel
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grayscale and VanEck is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and VanEck Steel ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Steel ETF 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 VanEck Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Steel ETF has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and VanEck Steel go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and VanEck Steel
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 2.69 times more return on investment than VanEck Steel. However, Grayscale Bitcoin is 2.69 times more volatile than VanEck Steel ETF. It trades about 0.09 of its potential returns per unit of risk. VanEck Steel ETF is currently generating about -0.01 per unit of risk. If you would invest 3,832 in Grayscale Bitcoin Trust on November 9, 2024 and sell it today you would earn a total of 3,846 from holding Grayscale Bitcoin Trust or generate 100.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. VanEck Steel ETF
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| VanEck Steel ETF |
Grayscale Bitcoin and VanEck Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and VanEck Steel
The main advantage of trading using opposite Grayscale Bitcoin and VanEck Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, VanEck Steel 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 VanEck Steel will offset losses from the drop in VanEck Steel'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 |
| VanEck Steel vs. SPDR SP Metals | VanEck Steel vs. VanEck Agribusiness ETF | VanEck Steel vs. Invesco DB Base | VanEck Steel vs. Invesco DB Agriculture |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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