Correlation Between Exxon and Grayscale Bitcoin
Can any of the company-specific risk be diversified away by investing in both Exxon 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 Exxon and Grayscale Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exxon Mobil Corp and Grayscale Bitcoin Mini, you can compare the effects of market volatilities on Exxon 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 Exxon with a short position of Grayscale Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Grayscale Bitcoin.
Diversification Opportunities for Exxon and Grayscale Bitcoin
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Exxon and Grayscale is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Grayscale Bitcoin Mini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Bitcoin Mini and Exxon 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 Exxon Mobil 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 Mini has no effect on the direction of Exxon i.e., Exxon and Grayscale Bitcoin go up and down completely randomly.
Pair Corralation between Exxon and Grayscale Bitcoin
Considering the 90-day investment horizon Exxon Mobil Corp is expected to under-perform the Grayscale Bitcoin. But the stock apears to be less risky and, when comparing its historical volatility, Exxon Mobil Corp is 3.03 times less risky than Grayscale Bitcoin. The stock trades about -0.28 of its potential returns per unit of risk. The Grayscale Bitcoin Mini is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,980 in Grayscale Bitcoin Mini on September 13, 2024 and sell it today you would earn a total of 454.00 from holding Grayscale Bitcoin Mini or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Grayscale Bitcoin Mini
Performance |
| Timeline |
| Exxon Mobil Corp |
| Grayscale Bitcoin Mini |
Exxon and Grayscale Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Grayscale Bitcoin
The main advantage of trading using opposite Exxon and Grayscale Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon 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.| Exxon vs. Aquagold International | Exxon vs. Thrivent High Yield | Exxon vs. Morningstar Unconstrained Allocation | Exxon vs. Via Renewables |
| Grayscale Bitcoin vs. ProShares Trust | Grayscale Bitcoin vs. iShares Ethereum Trust | Grayscale Bitcoin vs. ProShares Trust | 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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