Correlation Between Grayscale Bitcoin and UST Inc
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and UST Inc 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 UST Inc 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 ProShares Ultra 7 10, you can compare the effects of market volatilities on Grayscale Bitcoin and UST Inc 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 UST Inc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and UST Inc.
Diversification Opportunities for Grayscale Bitcoin and UST Inc
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grayscale and UST is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and ProShares Ultra 7 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra 7 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 UST Inc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra 7 has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and UST Inc go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and UST Inc
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 4.12 times more return on investment than UST Inc. However, Grayscale Bitcoin is 4.12 times more volatile than ProShares Ultra 7 10. It trades about 0.09 of its potential returns per unit of risk. ProShares Ultra 7 10 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. ProShares Ultra 7 10
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| ProShares Ultra 7 |
Grayscale Bitcoin and UST Inc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and UST Inc
The main advantage of trading using opposite Grayscale Bitcoin and UST Inc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, UST Inc 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 UST Inc will offset losses from the drop in UST Inc'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 |
| UST Inc vs. ProShares Ultra 20 | UST Inc vs. Universal | UST Inc vs. Direxion Daily 7 10 | UST Inc vs. ProShares UltraShort 7 10 |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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