This module allows you to analyze existing cross correlation between Coinbase Ethereum USD and Bitstamp Ethereum USD. You can compare the effects of market volatilities on Coinbase Ethereum and Bitstamp 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 Coinbase Ethereum with a short position of Bitstamp Ethereum. See also your portfolio center. Please also check ongoing floating volatility patterns of Coinbase Ethereum and Bitstamp Ethereum.
Assuming 30 trading days horizon, Coinbase Ethereum USD is expected to under-perform the Bitstamp Ethereum. But the crypto apears to be less risky and, when comparing its historical volatility, Coinbase Ethereum USD is 1.0 times less risky than Bitstamp Ethereum. The crypto trades about -0.05 of its potential returns per unit of risk. The Bitstamp Ethereum USD is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 65,219 in Bitstamp Ethereum USD on April 25, 2018 and sell it today you would lose (5,125) from holding Bitstamp Ethereum USD or give up 7.86% of portfolio value over 30 days.
Pair Corralation between Coinbase Ethereum and Bitstamp Ethereum
Overlapping area represents the amount of risk that can be diversified away by holding Coinbase Ethereum USD and Bitstamp Ethereum USD in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Bitstamp Ethereum USD and Coinbase 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 Coinbase Ethereum USD are associated (or correlated) with Bitstamp Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitstamp Ethereum USD has no effect on the direction of Coinbase Ethereum i.e. Coinbase Ethereum and Bitstamp Ethereum go up and down completely randomly.
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