Correlation Between Grayscale Filecoin and Grayscale Chainlink

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

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

Diversification Opportunities for Grayscale Filecoin and Grayscale Chainlink

0.91

Correlation Coefficient

Grayscale Filecoin  Grayscale Chainlink

Almost no diversification

The 3 months correlation between Grayscale and Grayscale is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Filecoin Trust and Grayscale Chainlink Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Chainlink Trust and Grayscale Filecoin 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 Filecoin Trust are associated (or correlated) with Grayscale Chainlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Chainlink Trust has no effect on the direction of Grayscale Filecoin i.e., Grayscale Filecoin and Grayscale Chainlink go up and down completely randomly.

Pair Corralation between Grayscale Filecoin and Grayscale Chainlink

Given the investment horizon of 90 days Grayscale Filecoin Trust is expected to generate 1.17 times more return on investment than Grayscale Chainlink. However, Grayscale Filecoin is 1.17 times more volatile than Grayscale Chainlink Trust. It trades about -0.09 of its potential returns per unit of risk. Grayscale Chainlink Trust is currently generating about -0.13 per unit of risk. If you would invest  6,600  in Grayscale Filecoin Trust on December 22, 2024 and sell it today you would lose (4,488) from holding Grayscale Filecoin Trust or give up 68.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Grayscale Filecoin Trust  vs.  Grayscale Chainlink Trust

Grayscale Filecoin Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grayscale Filecoin Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Grayscale Chainlink Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grayscale Chainlink Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Grayscale Filecoin and Grayscale Chainlink

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

The idea behind Grayscale Filecoin Trust and Grayscale Chainlink 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.