Correlation Between First Trust and Grayscale Ethereum
Can any of the company-specific risk be diversified away by investing in both First Trust 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 First Trust and Grayscale Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Multi Asset and Grayscale Ethereum Mini, you can compare the effects of market volatilities on First Trust 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 First Trust with a short position of Grayscale Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Grayscale Ethereum.
Diversification Opportunities for First Trust and Grayscale Ethereum
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Grayscale is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Multi Asset and Grayscale Ethereum Mini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Ethereum Mini and First Trust 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 First Trust Multi Asset 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 Mini has no effect on the direction of First Trust i.e., First Trust and Grayscale Ethereum go up and down completely randomly.
Pair Corralation between First Trust and Grayscale Ethereum
Given the investment horizon of 90 days First Trust is expected to generate 11.05 times less return on investment than Grayscale Ethereum. But when comparing it to its historical volatility, First Trust Multi Asset is 14.89 times less risky than Grayscale Ethereum. It trades about 0.51 of its potential returns per unit of risk. Grayscale Ethereum Mini is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 2,280 in Grayscale Ethereum Mini on September 3, 2024 and sell it today you would earn a total of 1,104 from holding Grayscale Ethereum Mini or generate 48.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Multi Asset vs. Grayscale Ethereum Mini
Performance |
| Timeline |
| First Trust Multi |
| Grayscale Ethereum Mini |
First Trust and Grayscale Ethereum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Grayscale Ethereum
The main advantage of trading using opposite First Trust and Grayscale Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust 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.| First Trust vs. Global X SuperIncome | First Trust vs. iShares Morningstar Multi Asset | First Trust vs. Invesco CEF Income | First Trust vs. VanEck Fallen Angel |
| Grayscale Ethereum vs. Grayscale Ethereum Trust | Grayscale Ethereum vs. Grayscale Bitcoin Mini | Grayscale Ethereum vs. Grayscale Solana Trust | Grayscale Ethereum vs. FT Vest Equity |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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