Correlation Between Grayscale Bitcoin and Schwab Strategic
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Schwab 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 Schwab 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 Schwab Strategic Trust, you can compare the effects of market volatilities on Grayscale Bitcoin and Schwab 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 Schwab Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Schwab Strategic.
Diversification Opportunities for Grayscale Bitcoin and Schwab Strategic
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Grayscale and Schwab is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and Schwab Strategic Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Strategic 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 Schwab Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Strategic Trust has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Schwab Strategic go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Schwab Strategic
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 0.75 times more return on investment than Schwab Strategic. However, Grayscale Bitcoin Trust is 1.34 times less risky than Schwab Strategic. It trades about 0.32 of its potential returns per unit of risk. Schwab Strategic Trust is currently generating about 0.23 per unit of risk. If you would invest 5,030 in Grayscale Bitcoin Trust on August 26, 2024 and sell it today you would earn a total of 2,857 from holding Grayscale Bitcoin Trust or generate 56.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. Schwab Strategic Trust
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| Schwab Strategic Trust |
Grayscale Bitcoin and Schwab Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Schwab Strategic
The main advantage of trading using opposite Grayscale Bitcoin and Schwab Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Schwab 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 Schwab Strategic will offset losses from the drop in Schwab 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 |
| Schwab Strategic vs. Inpex Corp ADR | Schwab Strategic vs. Managed Account Series | Schwab Strategic vs. Fidelity Sai International | Schwab Strategic vs. Daikin IndustriesLtd |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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