Correlation Between Grayscale Bitcoin and Bank Hapoalim
Can any of the company-specific risk be diversified away by investing in both Grayscale Bitcoin and Bank Hapoalim 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 Bank Hapoalim 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 Bank Hapoalim, you can compare the effects of market volatilities on Grayscale Bitcoin and Bank Hapoalim 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 Bank Hapoalim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Bitcoin and Bank Hapoalim.
Diversification Opportunities for Grayscale Bitcoin and Bank Hapoalim
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grayscale and Bank is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Bitcoin Trust and Bank Hapoalim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Hapoalim 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 Bank Hapoalim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Hapoalim has no effect on the direction of Grayscale Bitcoin i.e., Grayscale Bitcoin and Bank Hapoalim go up and down completely randomly.
Pair Corralation between Grayscale Bitcoin and Bank Hapoalim
Given the investment horizon of 90 days Grayscale Bitcoin Trust is expected to under-perform the Bank Hapoalim. In addition to that, Grayscale Bitcoin is 1.54 times more volatile than Bank Hapoalim. It trades about -0.1 of its total potential returns per unit of risk. Bank Hapoalim is currently generating about -0.07 per unit of volatility. If you would invest 346,600 in Bank Hapoalim on January 26, 2024 and sell it today you would lose (9,400) from holding Bank Hapoalim or give up 2.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
Grayscale Bitcoin Trust vs. Bank Hapoalim
Performance |
| Timeline |
| Grayscale Bitcoin Trust |
| Bank Hapoalim |
Grayscale Bitcoin and Bank Hapoalim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Bitcoin and Bank Hapoalim
The main advantage of trading using opposite Grayscale Bitcoin and Bank Hapoalim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Bitcoin position performs unexpectedly, Bank Hapoalim 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 Bank Hapoalim will offset losses from the drop in Bank Hapoalim's long position.| Grayscale Bitcoin vs. Grayscale Ethereum Trust | Grayscale Bitcoin vs. Riot Blockchain | Grayscale Bitcoin vs. Marathon Digital Holdings | Grayscale Bitcoin vs. Coinbase Global |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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