Correlation Between VelocityShares and Grayscale Litecoin Trust
Can any of the company-specific risk be diversified away by investing in both VelocityShares and Grayscale Litecoin Trust 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 VelocityShares and Grayscale Litecoin Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VelocityShares 3x Long and Grayscale Litecoin Trust, you can compare the effects of market volatilities on VelocityShares and Grayscale Litecoin Trust 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 VelocityShares with a short position of Grayscale Litecoin Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of VelocityShares and Grayscale Litecoin Trust.
Diversification Opportunities for VelocityShares and Grayscale Litecoin Trust
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VelocityShares and Grayscale is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding VelocityShares 3x Long 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 VelocityShares 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 VelocityShares 3x Long are associated (or correlated) with Grayscale Litecoin Trust. 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 VelocityShares i.e., VelocityShares and Grayscale Litecoin Trust go up and down completely randomly.
Pair Corralation between VelocityShares and Grayscale Litecoin Trust
If you would invest 1,472 in Grayscale Litecoin Trust on September 5, 2024 and sell it today you would earn a total of 525.00 from holding Grayscale Litecoin Trust or generate 35.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
VelocityShares 3x Long vs. Grayscale Litecoin Trust
Performance |
| Timeline |
| VelocityShares 3x Long |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Grayscale Litecoin Trust |
VelocityShares and Grayscale Litecoin Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VelocityShares and Grayscale Litecoin Trust
The main advantage of trading using opposite VelocityShares and Grayscale Litecoin Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VelocityShares position performs unexpectedly, Grayscale Litecoin Trust 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 Trust will offset losses from the drop in Grayscale Litecoin Trust's long position.| VelocityShares vs. Grayscale Litecoin Trust | VelocityShares vs. Grayscale Bitcoin Cash | VelocityShares vs. Indonesia Energy | VelocityShares vs. Ramaco Resources |
| Grayscale Litecoin Trust vs. First Tractor | Grayscale Litecoin Trust vs. Ag Growth International | Grayscale Litecoin Trust vs. AmeraMex International | Grayscale Litecoin Trust vs. Arts Way Manufacturing Co |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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