Correlation Between Grayscale Litecoin and Grayscale Ethereum
Can any of the company-specific risk be diversified away by investing in both Grayscale Litecoin and Grayscale Ethereum 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 Litecoin and Grayscale Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grayscale Litecoin Trust and Grayscale Ethereum Classic, you can compare the effects of market volatilities on Grayscale Litecoin and Grayscale Ethereum 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 Litecoin with a short position of Grayscale Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Litecoin and Grayscale Ethereum.
Diversification Opportunities for Grayscale Litecoin and Grayscale Ethereum
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grayscale and Grayscale is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Litecoin Trust and Grayscale Ethereum Classic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Ethereum and Grayscale Litecoin 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 Litecoin Trust are associated (or correlated) with Grayscale Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Ethereum has no effect on the direction of Grayscale Litecoin i.e., Grayscale Litecoin and Grayscale Ethereum go up and down completely randomly.
Pair Corralation between Grayscale Litecoin and Grayscale Ethereum
Given the investment horizon of 90 days Grayscale Litecoin is expected to generate 1.45 times less return on investment than Grayscale Ethereum. In addition to that, Grayscale Litecoin is 1.61 times more volatile than Grayscale Ethereum Classic. It trades about 0.09 of its total potential returns per unit of risk. Grayscale Ethereum Classic is currently generating about 0.21 per unit of volatility. If you would invest 871.00 in Grayscale Ethereum Classic on September 2, 2024 and sell it today you would earn a total of 604.00 from holding Grayscale Ethereum Classic or generate 69.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Litecoin Trust vs. Grayscale Ethereum Classic
Performance |
| Timeline |
| Grayscale Litecoin Trust |
| Grayscale Ethereum |
Grayscale Litecoin and Grayscale Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Litecoin and Grayscale Ethereum
The main advantage of trading using opposite Grayscale Litecoin and Grayscale Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Litecoin position performs unexpectedly, Grayscale Ethereum 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 Ethereum will offset losses from the drop in Grayscale Ethereum's long position.| Grayscale Litecoin vs. Morgan Stanley | Grayscale Litecoin vs. Goldman Sachs Group | Grayscale Litecoin vs. HUMANA INC | Grayscale Litecoin vs. SCOR PK |
| Grayscale Ethereum vs. Grayscale Bitcoin Cash | Grayscale Ethereum vs. Grayscale Litecoin Trust | Grayscale Ethereum vs. Grayscale Digital Large | Grayscale Ethereum vs. Grayscale Ethereum Trust |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |