Correlation Between Grayscale Bitcoin and Goose Hollow

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

Diversification Opportunities for Grayscale Bitcoin and Goose Hollow

-0.7

Correlation Coefficient

Grayscale Bitcoin  Goose Hollow

Excellent diversification

The 3 months correlation between Grayscale and Goose is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and Goose Hollow Multi Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goose Hollow Multi 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 Goose Hollow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goose Hollow Multi has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Goose Hollow go up and down completely randomly.

Pair Corralation between Grayscale Bitcoin and Goose Hollow

Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to generate 13.87 times more return on investment than Goose Hollow. However, Grayscale Bitcoin is 13.87 times more volatile than Goose Hollow Multi Strategy. It trades about 0.25 of its potential returns per unit of risk. Goose Hollow Multi Strategy is currently generating about -0.04 per unit of risk. If you would invest  4,675  in Grayscale Bitcoin Trust on August 30, 2024 and sell it today you would earn a total of  3,007  from holding Grayscale Bitcoin Trust or generate 64.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Grayscale Bitcoin Trust  vs.  Goose Hollow Multi Strategy

Grayscale Bitcoin Trust

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Bitcoin Trust are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Grayscale Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Goose Hollow Multi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goose Hollow Multi Strategy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Goose Hollow is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Grayscale Bitcoin and Goose Hollow

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

The idea behind Grayscale Bitcoin Trust and Goose Hollow Multi Strategy 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.