Correlation Between Volatility Shares and Grayscale Ethereum

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

By analyzing existing cross correlation between Volatility Shares Trust and Grayscale Ethereum Mini, you can compare the effects of market volatilities on Volatility Shares 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 Volatility Shares with a short position of Grayscale Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volatility Shares and Grayscale Ethereum.

Diversification Opportunities for Volatility Shares and Grayscale Ethereum

-0.21

Correlation Coefficient

Volatility Shares  Grayscale Ethereum

Very good diversification

The 3 months correlation between Volatility and Grayscale is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Volatility Shares Trust 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 Volatility Shares 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 Volatility Shares Trust 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 Volatility Shares i.e., Volatility Shares and Grayscale Ethereum go up and down completely randomly.

Pair Corralation between Volatility Shares and Grayscale Ethereum

Given the investment horizon of 90 days Volatility Shares Trust is expected to under-perform the Grayscale Ethereum. But the etf apears to be less risky and, when comparing its historical volatility, Volatility Shares Trust is 1.02 times less risky than Grayscale Ethereum. The etf trades about -0.04 of its potential returns per unit of risk. The Grayscale Ethereum Mini is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,352  in Grayscale Ethereum Mini on July 18, 2025 and sell it today you would earn a total of  399.00  from holding Grayscale Ethereum Mini or generate 11.9% return on investment over 90 days.

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

Volatility Shares Trust  vs.  Grayscale Ethereum Mini

Volatility Shares Trust

Risk-Adjusted Performance

Weakest

Over the last 90 days Volatility Shares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Grayscale Ethereum Mini

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Ethereum Mini are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Grayscale Ethereum demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Volatility Shares and Grayscale Ethereum

The main advantage of trading using opposite Volatility Shares and Grayscale Ethereum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volatility Shares 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.

The idea behind Volatility Shares Trust and Grayscale Ethereum Mini 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.