Correlation Between Charles Schwab and Grayscale Bitcoin
Can any of the company-specific risk be diversified away by investing in both Charles Schwab and Grayscale Bitcoin 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 Charles Schwab and Grayscale Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charles Schwab Corp and Grayscale Bitcoin Cash, you can compare the effects of market volatilities on Charles Schwab and Grayscale Bitcoin 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 Charles Schwab with a short position of Grayscale Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charles Schwab and Grayscale Bitcoin.
Diversification Opportunities for Charles Schwab and Grayscale Bitcoin
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Charles and Grayscale is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Charles Schwab Corp and Grayscale Bitcoin Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Bitcoin Cash and Charles Schwab 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 Charles Schwab Corp are associated (or correlated) with Grayscale Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Bitcoin Cash has no effect on the direction of Charles Schwab i.e., Charles Schwab and Grayscale Bitcoin go up and down completely randomly.
Pair Corralation between Charles Schwab and Grayscale Bitcoin
Given the investment horizon of 90 days Charles Schwab is expected to generate 1.08 times less return on investment than Grayscale Bitcoin. But when comparing it to its historical volatility, Charles Schwab Corp is 4.73 times less risky than Grayscale Bitcoin. It trades about 0.22 of its potential returns per unit of risk. Grayscale Bitcoin Cash is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 705.00 in Grayscale Bitcoin Cash on August 24, 2024 and sell it today you would earn a total of 50.00 from holding Grayscale Bitcoin Cash or generate 7.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Charles Schwab Corp vs. Grayscale Bitcoin Cash
Performance |
| Timeline |
| Charles Schwab Corp |
| Grayscale Bitcoin Cash |
Charles Schwab and Grayscale Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charles Schwab and Grayscale Bitcoin
The main advantage of trading using opposite Charles Schwab and Grayscale Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charles Schwab position performs unexpectedly, Grayscale Bitcoin 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 Bitcoin will offset losses from the drop in Grayscale Bitcoin's long position.| Charles Schwab vs. Goldman Sachs Group | Charles Schwab vs. Riot Blockchain | Charles Schwab vs. Jefferies Financial Group | Charles Schwab vs. Marathon Digital Holdings |
| Grayscale Bitcoin vs. Grayscale Litecoin Trust | Grayscale Bitcoin vs. Grayscale Digital Large | Grayscale Bitcoin vs. Bitwise 10 Crypto | Grayscale Bitcoin 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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