Correlation Between Zencash Investment and Grayscale Chainlink

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

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

Diversification Opportunities for Zencash Investment and Grayscale Chainlink

0.9

Correlation Coefficient

Zencash Investment  Grayscale Chainlink

Almost no diversification

The 3 months correlation between Zencash and Grayscale is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Zencash Investment 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 Zencash Investment 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 Zencash Investment 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 Zencash Investment i.e., Zencash Investment and Grayscale Chainlink go up and down completely randomly.

Pair Corralation between Zencash Investment and Grayscale Chainlink

Given the investment horizon of 90 days Zencash Investment Trust is expected to generate 0.54 times more return on investment than Grayscale Chainlink. However, Zencash Investment Trust is 1.84 times less risky than Grayscale Chainlink. It trades about -0.2 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  530.00  in Zencash Investment Trust on December 21, 2024 and sell it today you would lose (291.00) from holding Zencash Investment Trust or give up 54.91% of portfolio value over 90 days.

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

Zencash Investment Trust  vs.  Grayscale Chainlink Trust

Zencash Investment Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zencash Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 Zencash Investment and Grayscale Chainlink

The main advantage of trading using opposite Zencash Investment and Grayscale Chainlink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zencash Investment 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 Zencash Investment 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.