Correlation Between Siren Nasdaq and Grayscale Bitcoin

Can any of the company-specific risk be diversified away by investing in both Siren Nasdaq 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 Siren Nasdaq and Grayscale Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Siren Nasdaq NexGen and Grayscale Bitcoin Trust, you can compare the effects of market volatilities on Siren Nasdaq 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 Siren Nasdaq with a short position of Grayscale Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siren Nasdaq and Grayscale Bitcoin.

Diversification Opportunities for Siren Nasdaq and Grayscale Bitcoin

0.93

Correlation Coefficient

Siren Nasdaq  Grayscale Bitcoin

Almost no diversification

The 3 months correlation between Siren and Grayscale is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Siren Nasdaq NexGen and Grayscale Bitcoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Bitcoin Trust and Siren Nasdaq 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 Siren Nasdaq NexGen 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 Trust has no effect on the direction of Siren Nasdaq i.e., Siren Nasdaq and Grayscale Bitcoin go up and down completely randomly.

Pair Corralation between Siren Nasdaq and Grayscale Bitcoin

Given the investment horizon of 90 days Siren Nasdaq NexGen is expected to under-perform the Grayscale Bitcoin. But the etf apears to be less risky and, when comparing its historical volatility, Siren Nasdaq NexGen is 1.22 times less risky than Grayscale Bitcoin. The etf trades about -0.18 of its potential returns per unit of risk. The Grayscale Bitcoin Trust is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  7,465  in Grayscale Bitcoin Trust on December 29, 2024 and sell it today you would lose (847.00) from holding Grayscale Bitcoin Trust or give up 11.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Siren Nasdaq NexGen  vs.  Grayscale Bitcoin Trust

Siren Nasdaq NexGen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siren Nasdaq NexGen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Etf's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Grayscale Bitcoin Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grayscale Bitcoin Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with Siren Nasdaq and Grayscale Bitcoin

The main advantage of trading using opposite Siren Nasdaq and Grayscale Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siren Nasdaq 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.

The idea behind Siren Nasdaq NexGen and Grayscale Bitcoin Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.