Correlation Between Grayscale Digital and Grayscale Litecoin
Can any of the company-specific risk be diversified away by investing in both Grayscale Digital and Grayscale Litecoin 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 Digital and Grayscale Litecoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grayscale Digital Large and Grayscale Litecoin Trust, you can compare the effects of market volatilities on Grayscale Digital and Grayscale Litecoin 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 Digital with a short position of Grayscale Litecoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Digital and Grayscale Litecoin.
Diversification Opportunities for Grayscale Digital and Grayscale Litecoin
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grayscale and Grayscale is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Digital Large and Grayscale Litecoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Litecoin Trust and Grayscale Digital 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 Digital Large are associated (or correlated) with Grayscale Litecoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Litecoin Trust has no effect on the direction of Grayscale Digital i.e., Grayscale Digital and Grayscale Litecoin go up and down completely randomly.
Pair Corralation between Grayscale Digital and Grayscale Litecoin
Given the investment horizon of 90 days Grayscale Digital Large is expected to generate 0.37 times more return on investment than Grayscale Litecoin. However, Grayscale Digital Large is 2.71 times less risky than Grayscale Litecoin. It trades about 0.12 of its potential returns per unit of risk. Grayscale Litecoin Trust is currently generating about -0.01 per unit of risk. If you would invest 3,961 in Grayscale Digital Large on October 20, 2024 and sell it today you would earn a total of 639.00 from holding Grayscale Digital Large or generate 16.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Digital Large vs. Grayscale Litecoin Trust
Performance |
| Timeline |
| Grayscale Digital Large |
| Grayscale Litecoin Trust |
Grayscale Digital and Grayscale Litecoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Digital and Grayscale Litecoin
The main advantage of trading using opposite Grayscale Digital and Grayscale Litecoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Digital position performs unexpectedly, Grayscale Litecoin 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 Grayscale Litecoin will offset losses from the drop in Grayscale Litecoin's long position.| Grayscale Digital vs. Grayscale Litecoin Trust | Grayscale Digital vs. Grayscale Bitcoin Cash | Grayscale Digital vs. Grayscale Ethereum Trust | Grayscale Digital vs. Bitwise 10 Crypto |
| Grayscale Litecoin vs. Grayscale Bitcoin Cash | Grayscale Litecoin vs. Grayscale Digital Large | Grayscale Litecoin vs. Grayscale Ethereum Trust | Grayscale Litecoin vs. Bitwise 10 Crypto |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Global Correlations Find global opportunities by holding instruments from different markets |