This module allows you to analyze existing cross correlation between Coinbase Bitcoin USD and Quoine NEO USD. You can compare the effects of market volatilities on Coinbase Bitcoin and Quoine NEO 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 Coinbase Bitcoin with a short position of Quoine NEO. See also your portfolio center. Please also check ongoing floating volatility patterns of Coinbase Bitcoin and Quoine NEO.
Assuming 30 trading days horizon, Coinbase Bitcoin USD is expected to generate 0.67 times more return on investment than Quoine NEO. However, Coinbase Bitcoin USD is 1.49 times less risky than Quoine NEO. It trades about -0.03 of its potential returns per unit of risk. Quoine NEO USD is currently generating about -0.08 per unit of risk. If you would invest 1,034,800 in Coinbase Bitcoin USD on March 22, 2018 and sell it today you would lose (150,187) from holding Coinbase Bitcoin USD or give up 14.51% of portfolio value over 30 days.
Pair Corralation between Coinbase Bitcoin and Quoine NEO
Overlapping area represents the amount of risk that can be diversified away by holding Coinbase Bitcoin USD and Quoine NEO USD in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Quoine NEO USD and Coinbase 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 Coinbase Bitcoin USD are associated (or correlated) with Quoine NEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quoine NEO USD has no effect on the direction of Coinbase Bitcoin i.e. Coinbase Bitcoin and Quoine NEO go up and down completely randomly.
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