Correlation Between Grayscale Litecoin and Grayscale Zcash
Can any of the company-specific risk be diversified away by investing in both Grayscale Litecoin and Grayscale Zcash 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 Zcash 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 Zcash Trust, you can compare the effects of market volatilities on Grayscale Litecoin and Grayscale Zcash 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 Zcash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Litecoin and Grayscale Zcash.
Diversification Opportunities for Grayscale Litecoin and Grayscale Zcash
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grayscale and Grayscale is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Litecoin Trust and Grayscale Zcash Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Zcash Trust 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 Zcash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Zcash Trust has no effect on the direction of Grayscale Litecoin i.e., Grayscale Litecoin and Grayscale Zcash go up and down completely randomly.
Pair Corralation between Grayscale Litecoin and Grayscale Zcash
Given the investment horizon of 90 days Grayscale Litecoin Trust is expected to under-perform the Grayscale Zcash. But the otc stock apears to be less risky and, when comparing its historical volatility, Grayscale Litecoin Trust is 1.04 times less risky than Grayscale Zcash. The otc stock trades about -0.24 of its potential returns per unit of risk. The Grayscale Zcash Trust is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 713.00 in Grayscale Zcash Trust on October 12, 2024 and sell it today you would lose (165.00) from holding Grayscale Zcash Trust or give up 23.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Litecoin Trust vs. Grayscale Zcash Trust
Performance |
| Timeline |
| Grayscale Litecoin Trust |
| Grayscale Zcash Trust |
Grayscale Litecoin and Grayscale Zcash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Litecoin and Grayscale Zcash
The main advantage of trading using opposite Grayscale Litecoin and Grayscale Zcash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Litecoin position performs unexpectedly, Grayscale Zcash 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 Zcash will offset losses from the drop in Grayscale Zcash's long position.| Grayscale Litecoin vs. Grayscale Bitcoin Cash | Grayscale Litecoin vs. Grayscale Digital Large | Grayscale Litecoin vs. Grayscale Ethereum Trust | Grayscale Litecoin vs. Bitwise 10 Crypto |
| Grayscale Zcash vs. Grayscale Stellar Lumens | Grayscale Zcash vs. Zencash Investment Trust | Grayscale Zcash vs. Osprey Solana Trust | Grayscale Zcash vs. Discount Print USA |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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