Correlation Between Zencash Investment and Grayscale Bitcoin

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

Diversification Opportunities for Zencash Investment and Grayscale Bitcoin

0.42

Correlation Coefficient

Zencash Investment  Grayscale Bitcoin

Very weak diversification

The 3 months correlation between Zencash and Grayscale is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Zencash Investment Trust and Grayscale Bitcoin Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Bitcoin Cash 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 Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Bitcoin Cash has no effect on the direction of Zencash Investment i.e., Zencash Investment and Grayscale Bitcoin go up and down completely randomly.

Pair Corralation between Zencash Investment and Grayscale Bitcoin

Given the investment horizon of 90 days Zencash Investment Trust is expected to generate 1.32 times more return on investment than Grayscale Bitcoin. However, Zencash Investment is 1.32 times more volatile than Grayscale Bitcoin Cash. It trades about 0.2 of its potential returns per unit of risk. Grayscale Bitcoin Cash is currently generating about -0.07 per unit of risk. If you would invest  403.00  in Zencash Investment Trust on September 21, 2024 and sell it today you would earn a total of  166.00  from holding Zencash Investment Trust or generate 41.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Zencash Investment Trust  vs.  Grayscale Bitcoin Cash

Zencash Investment Trust

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zencash Investment Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Zencash Investment displayed solid returns over the last few months and may actually be approaching a breakup point.

Grayscale Bitcoin Cash

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Bitcoin Cash are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Grayscale Bitcoin reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zencash Investment and Grayscale Bitcoin

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

The idea behind Zencash Investment Trust and Grayscale Bitcoin Cash 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.