Correlation Between Grayscale Bitcoin and Innovator Long
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Innovator Long 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 Innovator Long 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 Innovator Long Term, you can compare the effects of market volatilities on Grayscale Bitcoin and Innovator Long 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 Innovator Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Innovator Long.
Diversification Opportunities for Grayscale Bitcoin and Innovator Long
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grayscale and Innovator is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and Innovator Long Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Long Term 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 Innovator Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Long Term has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Innovator Long go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Innovator Long
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 12.43 times more return on investment than Innovator Long. However, Grayscale Bitcoin is 12.43 times more volatile than Innovator Long Term. It trades about 0.32 of its potential returns per unit of risk. Innovator Long Term is currently generating about -0.07 per unit of risk. If you would invest 5,767 in Grayscale Bitcoin Trust on August 30, 2024 and sell it today you would earn a total of 1,915 from holding Grayscale Bitcoin Trust or generate 33.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. Innovator Long Term
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| Innovator Long Term |
Grayscale Bitcoin and Innovator Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Innovator Long
The main advantage of trading using opposite Grayscale Bitcoin and Innovator Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Innovator Long 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 Innovator Long will offset losses from the drop in Innovator Long'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 |
| Innovator Long vs. Innovator 20 Year | Innovator Long vs. Northern Lights | Innovator Long vs. iShares 25 Year | Innovator Long vs. First Trust Exchange Traded |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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