Correlation Between Citrine Global and Grayscale Livepeer

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

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

Diversification Opportunities for Citrine Global and Grayscale Livepeer

0.06

Correlation Coefficient

Citrine Global  Grayscale Livepeer

Significant diversification

The 3 months correlation between Citrine and Grayscale is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Citrine Global Corp and Grayscale Livepeer Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Livepeer Trust and Citrine Global 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 Citrine Global Corp are associated (or correlated) with Grayscale Livepeer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Livepeer Trust has no effect on the direction of Citrine Global i.e., Citrine Global and Grayscale Livepeer go up and down completely randomly.

Pair Corralation between Citrine Global and Grayscale Livepeer

Given the investment horizon of 90 days Citrine Global Corp is expected to under-perform the Grayscale Livepeer. But the pink sheet apears to be less risky and, when comparing its historical volatility, Citrine Global Corp is 1.07 times less risky than Grayscale Livepeer. The pink sheet trades about -0.15 of its potential returns per unit of risk. The Grayscale Livepeer Trust is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,475  in Grayscale Livepeer Trust on October 25, 2024 and sell it today you would lose (150.00) from holding Grayscale Livepeer Trust or give up 10.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Citrine Global Corp  vs.  Grayscale Livepeer Trust

Citrine Global Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Citrine Global Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Grayscale Livepeer Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Livepeer Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward indicators, Grayscale Livepeer showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citrine Global and Grayscale Livepeer

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

The idea behind Citrine Global Corp and Grayscale Livepeer 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 Transaction History module to view history of all your transactions and understand their impact on performance.