This module allows you to analyze existing cross correlation between Bitfinex Ethereum USD and Coinbase Ethereum USD. You can compare the effects of market volatilities on Bitfinex Ethereum and Coinbase 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 Bitfinex Ethereum with a short position of Coinbase Ethereum. See also your portfolio center. Please also check ongoing floating volatility patterns of Bitfinex Ethereum and Coinbase Ethereum.
Assuming 30 trading days horizon, Bitfinex Ethereum USD is expected to under-perform the Coinbase Ethereum. In addition to that, Bitfinex Ethereum is 1.02 times more volatile than Coinbase Ethereum USD. It trades about -0.23 of its total potential returns per unit of risk. Coinbase Ethereum USD is currently generating about -0.23 per unit of volatility. If you would invest 44,451 in Coinbase Ethereum USD on July 19, 2018 and sell it today you would lose (13,200) from holding Coinbase Ethereum USD or give up 29.7% of portfolio value over 30 days.
Pair Corralation between Bitfinex Ethereum and Coinbase Ethereum
Overlapping area represents the amount of risk that can be diversified away by holding Bitfinex Ethereum USD and Coinbase Ethereum USD in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Coinbase Ethereum USD and Bitfinex Ethereum 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 Bitfinex Ethereum USD are associated (or correlated) with Coinbase Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coinbase Ethereum USD has no effect on the direction of Bitfinex Ethereum i.e. Bitfinex Ethereum and Coinbase Ethereum go up and down completely randomly.
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