Correlation Between Grayscale Bitcoin and Sprott Junior
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Sprott Junior 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 Sprott Junior 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 Sprott Junior Uranium, you can compare the effects of market volatilities on Grayscale Bitcoin and Sprott Junior 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 Sprott Junior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Sprott Junior.
Diversification Opportunities for Grayscale Bitcoin and Sprott Junior
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grayscale and Sprott is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and Sprott Junior Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Junior Uranium 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 Sprott Junior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Junior Uranium has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Sprott Junior go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Sprott Junior
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 0.6 times more return on investment than Sprott Junior. However, Grayscale Bitcoin Trust is 1.66 times less risky than Sprott Junior. It trades about 0.23 of its potential returns per unit of risk. Sprott Junior Uranium is currently generating about 0.11 per unit of risk. If you would invest 7,402 in Grayscale Bitcoin Trust on November 1, 2024 and sell it today you would earn a total of 916.00 from holding Grayscale Bitcoin Trust or generate 12.38% 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. Sprott Junior Uranium
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| Sprott Junior Uranium |
Grayscale Bitcoin and Sprott Junior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Sprott Junior
The main advantage of trading using opposite Grayscale Bitcoin and Sprott Junior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Sprott Junior 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 Sprott Junior will offset losses from the drop in Sprott Junior'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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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