Correlation Between Bitcoin Cash and AION
Can any of the company-specific risk be diversified away by investing in both Bitcoin Cash and AION 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 Bitcoin Cash and AION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Cash and AION, you can compare the effects of market volatilities on Bitcoin Cash and AION 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 Bitcoin Cash with a short position of AION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Cash and AION.
Diversification Opportunities for Bitcoin Cash and AION
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bitcoin and AION is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Cash and AION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AION and Bitcoin Cash 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 Bitcoin Cash are associated (or correlated) with AION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AION has no effect on the direction of Bitcoin Cash i.e., Bitcoin Cash and AION go up and down completely randomly.
Pair Corralation between Bitcoin Cash and AION
Assuming the 90 days trading horizon Bitcoin Cash is expected to generate 11.99 times less return on investment than AION. But when comparing it to its historical volatility, Bitcoin Cash is 7.18 times less risky than AION. It trades about 0.17 of its potential returns per unit of risk. AION is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 0.11 in AION on January 20, 2024 and sell it today you would earn a total of 0.40 from holding AION or generate 361.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin Cash vs. AION
Performance |
| Timeline |
| Bitcoin Cash |
| AION |
Bitcoin Cash and AION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Cash and AION
The main advantage of trading using opposite Bitcoin Cash and AION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Cash position performs unexpectedly, AION 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 AION will offset losses from the drop in AION's long position.| Bitcoin Cash vs. Bitcoin | Bitcoin Cash vs. Dogecoin | Bitcoin Cash vs. Litecoin | Bitcoin Cash vs. Ethereum Classic |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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