Correlation Between Harbor ETF and Grayscale Bitcoin

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

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

Diversification Opportunities for Harbor ETF and Grayscale Bitcoin

-0.01

Correlation Coefficient

Harbor ETF  Grayscale Bitcoin

Good diversification

The 3 months correlation between Harbor and Grayscale is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Harbor ETF Trust 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 Harbor ETF 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 Harbor ETF Trust 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 Harbor ETF i.e., Harbor ETF and Grayscale Bitcoin go up and down completely randomly.

Pair Corralation between Harbor ETF and Grayscale Bitcoin

Given the investment horizon of 90 days Harbor ETF Trust is expected to under-perform the Grayscale Bitcoin. But the etf apears to be less risky and, when comparing its historical volatility, Harbor ETF Trust is 4.37 times less risky than Grayscale Bitcoin. The etf trades about -0.03 of its potential returns per unit of risk. The Grayscale Bitcoin Mini is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  4,263  in Grayscale Bitcoin Mini on October 10, 2024 and sell it today you would earn a total of  11.00  from holding Grayscale Bitcoin Mini or generate 0.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	60.0%
Values	Daily Returns

Harbor ETF Trust  vs.  Grayscale Bitcoin Mini

Harbor ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harbor ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Harbor ETF is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Grayscale Bitcoin Mini

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Bitcoin Mini are ranked lower than 18 (%) 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.

Pair Trading with Harbor ETF and Grayscale Bitcoin

The main advantage of trading using opposite Harbor ETF and Grayscale Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor ETF 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 Harbor ETF Trust and Grayscale Bitcoin Mini 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.