Correlation Between Grayscale Ethereum and IShares Paris

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

By analyzing existing cross correlation between Grayscale Ethereum Mini and iShares Paris Aligned Climate, you can compare the effects of market volatilities on Grayscale Ethereum and IShares Paris 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 Ethereum with a short position of IShares Paris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Ethereum and IShares Paris.

Diversification Opportunities for Grayscale Ethereum and IShares Paris

-0.86

Correlation Coefficient

Grayscale Ethereum  IShares Paris

Pay attention - limited upside

The 3 months correlation between Grayscale and IShares is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Ethereum Mini and iShares Paris Aligned Climate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Paris Aligned and Grayscale Ethereum 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 Ethereum Mini are associated (or correlated) with IShares Paris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Paris Aligned has no effect on the direction of Grayscale Ethereum i.e., Grayscale Ethereum and IShares Paris go up and down completely randomly.

Pair Corralation between Grayscale Ethereum and IShares Paris

Considering the 90-day investment horizon Grayscale Ethereum Mini is expected to under-perform the IShares Paris. In addition to that, Grayscale Ethereum is 5.19 times more volatile than iShares Paris Aligned Climate. It trades about -0.19 of its total potential returns per unit of risk. iShares Paris Aligned Climate is currently generating about 0.12 per unit of volatility. If you would invest  5,131  in iShares Paris Aligned Climate on December 29, 2024 and sell it today you would earn a total of  338.00  from holding iShares Paris Aligned Climate or generate 6.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Grayscale Ethereum Mini  vs.  iShares Paris Aligned Climate

Grayscale Ethereum Mini

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grayscale Ethereum Mini has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the Etf traders.

iShares Paris Aligned

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Paris Aligned Climate are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, IShares Paris may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Grayscale Ethereum and IShares Paris

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

The idea behind Grayscale Ethereum Mini and iShares Paris Aligned Climate 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.