Correlation Between Grayscale Bitcoin and Grayscale Advisors

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

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

Diversification Opportunities for Grayscale Bitcoin and Grayscale Advisors

0.0

Correlation Coefficient

Grayscale Bitcoin  Grayscale Advisors

Pay attention - limited upside

The 3 months correlation between Grayscale and Grayscale is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and Grayscale Advisors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Advisors and Grayscale Bitcoin 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 Bitcoin Trust are associated (or correlated) with Grayscale Advisors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Advisors has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Grayscale Advisors go up and down completely randomly.

Pair Corralation between Grayscale Bitcoin and Grayscale Advisors

If you would invest (100.00) in Grayscale Advisors on November 28, 2024 and sell it today you would earn a total of  100.00  from holding Grayscale Advisors or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Grayscale Bitcoin Trust  vs.  Grayscale Advisors

Grayscale Bitcoin Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grayscale Bitcoin Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Grayscale Advisors

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grayscale Advisors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Grayscale Advisors is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Grayscale Bitcoin and Grayscale Advisors

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

The idea behind Grayscale Bitcoin Trust and Grayscale Advisors 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.