Correlation Between Bitcoin Gold and LAMB
Can any of the company-specific risk be diversified away by investing in both Bitcoin Gold and LAMB 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 Gold and LAMB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Gold and LAMB, you can compare the effects of market volatilities on Bitcoin Gold and LAMB 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 Gold with a short position of LAMB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Gold and LAMB.
Diversification Opportunities for Bitcoin Gold and LAMB
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bitcoin and LAMB is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Gold and LAMB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAMB and Bitcoin Gold 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 Gold are associated (or correlated) with LAMB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAMB has no effect on the direction of Bitcoin Gold i.e., Bitcoin Gold and LAMB go up and down completely randomly.
Pair Corralation between Bitcoin Gold and LAMB
Assuming the 90 days trading horizon Bitcoin Gold is expected to generate 0.54 times more return on investment than LAMB. However, Bitcoin Gold is 1.85 times less risky than LAMB. It trades about -0.26 of its potential returns per unit of risk. LAMB is currently generating about -0.18 per unit of risk. If you would invest 4,565 in Bitcoin Gold on January 26, 2024 and sell it today you would lose (1,131) from holding Bitcoin Gold or give up 24.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin Gold vs. LAMB
Performance |
| Timeline |
| Bitcoin Gold |
| LAMB |
Bitcoin Gold and LAMB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Gold and LAMB
The main advantage of trading using opposite Bitcoin Gold and LAMB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Gold position performs unexpectedly, LAMB 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 LAMB will offset losses from the drop in LAMB's long position.| Bitcoin Gold vs. Bitcoin | Bitcoin Gold vs. Dogecoin | Bitcoin Gold vs. Bitcoin Cash | Bitcoin Gold vs. Litecoin |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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