Correlation Between Grayscale Bitcoin and Invesco

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

Diversification Opportunities for Grayscale Bitcoin and Invesco

0.0

Correlation Coefficient

Grayscale Bitcoin  Invesco

Pay attention - limited upside

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

Pair Corralation between Grayscale Bitcoin and Invesco

If you would invest (100.00) in Invesco on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Invesco 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.  Invesco

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.

Invesco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Invesco is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Grayscale Bitcoin and Invesco

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

The idea behind Grayscale Bitcoin Trust and Invesco 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.