Correlation Between Simplify Equity and Grayscale Ethereum
Can any of the company-specific risk be diversified away by investing in both Simplify Equity 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 Simplify Equity and Grayscale Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simplify Equity PLUS and Grayscale Ethereum Mini, you can compare the effects of market volatilities on Simplify Equity 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 Simplify Equity with a short position of Grayscale Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Equity and Grayscale Ethereum.
Diversification Opportunities for Simplify Equity and Grayscale Ethereum
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Simplify and Grayscale is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Equity PLUS 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 Simplify Equity 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 Simplify Equity PLUS 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 Simplify Equity i.e., Simplify Equity and Grayscale Ethereum go up and down completely randomly.
Pair Corralation between Simplify Equity and Grayscale Ethereum
Given the investment horizon of 90 days Simplify Equity PLUS is expected to generate 0.22 times more return on investment than Grayscale Ethereum. However, Simplify Equity PLUS is 4.46 times less risky than Grayscale Ethereum. It trades about 0.15 of its potential returns per unit of risk. Grayscale Ethereum Mini is currently generating about 0.03 per unit of risk. If you would invest 1,890 in Simplify Equity PLUS on September 26, 2024 and sell it today you would earn a total of 2,111 from holding Simplify Equity PLUS or generate 111.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 21.98% |
Values | Daily Returns |
Simplify Equity PLUS vs. Grayscale Ethereum Mini
Performance |
Timeline |
Simplify Equity PLUS |
Grayscale Ethereum Mini |
Simplify Equity and Grayscale Ethereum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Simplify Equity and Grayscale Ethereum
The main advantage of trading using opposite Simplify Equity and Grayscale Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify Equity 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.Simplify Equity vs. Grayscale Bitcoin Trust | Simplify Equity vs. Siren Nasdaq NexGen | Simplify Equity vs. VanEck Digital Transformation | Simplify Equity vs. First Trust SkyBridge |
Grayscale Ethereum vs. Grayscale Bitcoin Trust | Grayscale Ethereum vs. Siren Nasdaq NexGen | Grayscale Ethereum vs. Simplify Equity PLUS | Grayscale Ethereum vs. VanEck Digital Transformation |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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