Correlation Between Grayscale Bitcoin and FT Vest
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and FT Vest 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 FT Vest 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 FT Vest Equity, you can compare the effects of market volatilities on Grayscale Bitcoin and FT Vest 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 FT Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and FT Vest.
Diversification Opportunities for Grayscale Bitcoin and FT Vest
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grayscale and XMAY is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and FT Vest Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Vest Equity 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 FT Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Vest Equity has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and FT Vest go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and FT Vest
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 18.99 times more return on investment than FT Vest. However, Grayscale Bitcoin is 18.99 times more volatile than FT Vest Equity. It trades about 0.3 of its potential returns per unit of risk. FT Vest Equity is currently generating about 0.22 per unit of risk. If you would invest 5,538 in Grayscale Bitcoin Trust on August 29, 2024 and sell it today you would earn a total of 1,679 from holding Grayscale Bitcoin Trust or generate 30.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. FT Vest Equity
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| FT Vest Equity |
Grayscale Bitcoin and FT Vest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and FT Vest
The main advantage of trading using opposite Grayscale Bitcoin and FT Vest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, FT Vest 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 FT Vest will offset losses from the drop in FT Vest'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 |
| FT Vest vs. FT Vest Equity | FT Vest vs. Northern Lights | FT Vest vs. Dimensional International High | FT Vest 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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