Correlation Between Grayscale Ethereum and 21shares Core

Can any of the company-specific risk be diversified away by investing in both Grayscale Ethereum and 21shares Core 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 21shares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grayscale Ethereum Trust and 21shares Core Ethereum, you can compare the effects of market volatilities on Grayscale Ethereum and 21shares Core 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 21shares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Ethereum and 21shares Core.

Diversification Opportunities for Grayscale Ethereum and 21shares Core

0.92

Correlation Coefficient

Grayscale Ethereum  21shares Core

Almost no diversification

The 3 months correlation between Grayscale and 21shares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Ethereum Trust and 21shares Core Ethereum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 21shares Core Ethereum 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 Trust are associated (or correlated) with 21shares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 21shares Core Ethereum has no effect on the direction of Grayscale Ethereum i.e., Grayscale Ethereum and 21shares Core go up and down completely randomly.

Pair Corralation between Grayscale Ethereum and 21shares Core

Given the investment horizon of 90 days Grayscale Ethereum Trust is expected to under-perform the 21shares Core. In addition to that, Grayscale Ethereum is 1.01 times more volatile than 21shares Core Ethereum. It trades about -0.18 of its total potential returns per unit of risk. 21shares Core Ethereum is currently generating about -0.17 per unit of volatility. If you would invest  1,698  in 21shares Core Ethereum on December 21, 2024 and sell it today you would lose (712.00) from holding 21shares Core Ethereum or give up 41.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.33%
Values	Daily Returns

Grayscale Ethereum Trust  vs.  21shares Core Ethereum

Grayscale Ethereum Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grayscale Ethereum Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Etf's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

21shares Core Ethereum

Risk-Adjusted Performance

Very Weak

Over the last 90 days 21shares Core Ethereum 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.

Pair Trading with Grayscale Ethereum and 21shares Core

The main advantage of trading using opposite Grayscale Ethereum and 21shares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Ethereum position performs unexpectedly, 21shares Core 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 21shares Core will offset losses from the drop in 21shares Core's long position.

The idea behind Grayscale Ethereum Trust and 21shares Core Ethereum 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .