Correlation Between Grayscale Bitcoin and 26875PAU5

Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and 26875PAU5 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 26875PAU5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grayscale Bitcoin Mini and EOG RESOURCES INC, you can compare the effects of market volatilities on Grayscale Bitcoin and 26875PAU5 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 26875PAU5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and 26875PAU5.

Diversification Opportunities for Grayscale Bitcoin and 26875PAU5

-0.68

Correlation Coefficient

Grayscale Bitcoin  26875PAU5

Excellent diversification

The 3 months correlation between Grayscale and 26875PAU5 is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Mini and EOG RESOURCES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EOG RESOURCES INC 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 Mini are associated (or correlated) with 26875PAU5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EOG RESOURCES INC has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and 26875PAU5 go up and down completely randomly.

Pair Corralation between Grayscale Bitcoin and 26875PAU5

Considering the 90-day investment horizon Grayscale Bitcoin Mini is expected to under-perform the 26875PAU5. In addition to that, Grayscale Bitcoin is 7.69 times more volatile than EOG RESOURCES INC. It trades about -0.01 of its total potential returns per unit of risk. EOG RESOURCES INC is currently generating about 0.0 per unit of volatility. If you would invest  9,900  in EOG RESOURCES INC on September 27, 2024 and sell it today you would lose (16.00) from holding EOG RESOURCES INC or give up 0.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.37%
Values	Daily Returns

Grayscale Bitcoin Mini  vs.  EOG RESOURCES INC

Grayscale Bitcoin Mini

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Bitcoin Mini are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Grayscale Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

EOG RESOURCES INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EOG RESOURCES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26875PAU5 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grayscale Bitcoin and 26875PAU5

The main advantage of trading using opposite Grayscale Bitcoin and 26875PAU5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, 26875PAU5 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 26875PAU5 will offset losses from the drop in 26875PAU5's long position.

The idea behind Grayscale Bitcoin Mini and EOG RESOURCES INC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.