Correlation Between Grayscale Ethereum and Schwab Intermediate

Can any of the company-specific risk be diversified away by investing in both Grayscale Ethereum and Schwab Intermediate 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 Schwab Intermediate 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 Schwab Intermediate Term Treasury, you can compare the effects of market volatilities on Grayscale Ethereum and Schwab Intermediate 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 Schwab Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Ethereum and Schwab Intermediate.

Diversification Opportunities for Grayscale Ethereum and Schwab Intermediate

-0.32

Correlation Coefficient

Grayscale Ethereum  Schwab Intermediate

Very good diversification

The 3 months correlation between Grayscale and Schwab is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Ethereum Mini and Schwab Intermediate Term Treas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Intermediate 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 Schwab Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Intermediate has no effect on the direction of Grayscale Ethereum i.e., Grayscale Ethereum and Schwab Intermediate go up and down completely randomly.

Pair Corralation between Grayscale Ethereum and Schwab Intermediate

Considering the 90-day investment horizon Grayscale Ethereum Mini is expected to under-perform the Schwab Intermediate. In addition to that, Grayscale Ethereum is 17.0 times more volatile than Schwab Intermediate Term Treasury. It trades about -0.16 of its total potential returns per unit of risk. Schwab Intermediate Term Treasury is currently generating about 0.09 per unit of volatility. If you would invest  2,447  in Schwab Intermediate Term Treasury on December 1, 2024 and sell it today you would earn a total of  34.00  from holding Schwab Intermediate Term Treasury or generate 1.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Grayscale Ethereum Mini  vs.  Schwab Intermediate Term Treas

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.

Schwab Intermediate

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Schwab Intermediate Term Treasury are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, Schwab Intermediate is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Grayscale Ethereum and Schwab Intermediate

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

The idea behind Grayscale Ethereum Mini and Schwab Intermediate Term Treasury 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.