Correlation Between Grayscale Bitcoin and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and SPDR Portfolio 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 SPDR Portfolio 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 SPDR Portfolio Europe, you can compare the effects of market volatilities on Grayscale Bitcoin and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and SPDR Portfolio.
Diversification Opportunities for Grayscale Bitcoin and SPDR Portfolio
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grayscale and SPDR is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and SPDR Portfolio Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio Europe 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio Europe has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and SPDR Portfolio go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and SPDR Portfolio
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 4.49 times more return on investment than SPDR Portfolio. However, Grayscale Bitcoin is 4.49 times more volatile than SPDR Portfolio Europe. It trades about 0.1 of its potential returns per unit of risk. SPDR Portfolio Europe is currently generating about 0.05 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. SPDR Portfolio Europe
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| SPDR Portfolio Europe |
Grayscale Bitcoin and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and SPDR Portfolio
The main advantage of trading using opposite Grayscale Bitcoin and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio'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 |
| SPDR Portfolio vs. Franklin FTSE Europe | SPDR Portfolio vs. SPDR Portfolio MSCI | SPDR Portfolio vs. iShares Core MSCI | SPDR Portfolio vs. JPMorgan BetaBuilders Europe |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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