Correlation Between Grayscale Bitcoin and MARRIOTT

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

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

Diversification Opportunities for Grayscale Bitcoin and MARRIOTT

-0.59

Correlation Coefficient

Grayscale Bitcoin  MARRIOTT

Excellent diversification

The 3 months correlation between Grayscale and MARRIOTT is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and MARRIOTT INTL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARRIOTT INTL INC and Grayscale Bitcoin 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 Grayscale Bitcoin Mini are associated (or correlated) with MARRIOTT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARRIOTT INTL INC has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and MARRIOTT go up and down completely randomly.

Pair Corralation between Grayscale Bitcoin and MARRIOTT

Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to generate 2.55 times more return on investment than MARRIOTT. However, Grayscale Bitcoin is 2.55 times more volatile than MARRIOTT INTL INC. It trades about -0.07 of its potential returns per unit of risk. MARRIOTT INTL INC is currently generating about -0.51 per unit of risk. If you would invest  4,434  in Grayscale Bitcoin Mini on October 13, 2024 and sell it today you would lose (235.00) from holding Grayscale Bitcoin Mini or give up 5.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	57.89%
Values	Daily Returns

Grayscale Bitcoin Mini  vs.  MARRIOTT INTL INC

Grayscale Bitcoin Mini

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Bitcoin Mini are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Grayscale Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

MARRIOTT INTL INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARRIOTT INTL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for MARRIOTT INTL INC investors.

Pair Trading with Grayscale Bitcoin and MARRIOTT

The main advantage of trading using opposite Grayscale Bitcoin and MARRIOTT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, MARRIOTT 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 MARRIOTT will offset losses from the drop in MARRIOTT's long position.

The idea behind Grayscale Bitcoin Mini and MARRIOTT INTL INC 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.