Correlation Between Grayscale Solana and Grayscale Ethereum

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

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

Diversification Opportunities for Grayscale Solana and Grayscale Ethereum

0.94

Correlation Coefficient

Grayscale Solana  Grayscale Ethereum

Almost no diversification

The 3 months correlation between Grayscale and Grayscale is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Solana Trust and Grayscale Ethereum Mini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Ethereum Mini and Grayscale Solana 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 Solana Trust are associated (or correlated) with Grayscale Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Ethereum Mini has no effect on the direction of Grayscale Solana i.e., Grayscale Solana and Grayscale Ethereum go up and down completely randomly.

Pair Corralation between Grayscale Solana and Grayscale Ethereum

Given the investment horizon of 90 days Grayscale Solana Trust is expected to under-perform the Grayscale Ethereum. In addition to that, Grayscale Solana is 1.58 times more volatile than Grayscale Ethereum Mini. It trades about -0.15 of its total potential returns per unit of risk. Grayscale Ethereum Mini is currently generating about -0.19 per unit of volatility. If you would invest  3,201  in Grayscale Ethereum Mini on December 30, 2024 and sell it today you would lose (1,437) from holding Grayscale Ethereum Mini or give up 44.89% of portfolio value over 90 days.

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

Grayscale Solana Trust  vs.  Grayscale Ethereum Mini

Grayscale Solana Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grayscale Solana Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Etf'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 ETF venture institutional investors.

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.

Pair Trading with Grayscale Solana and Grayscale Ethereum

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

The idea behind Grayscale Solana Trust and Grayscale Ethereum Mini 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.