This module allows you to analyze existing cross correlation between HitBTC Bitcoin USD and Bitfinex Bitcoin USD. You can compare the effects of market volatilities on HitBTC Bitcoin and Bitfinex Bitcoin 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 HitBTC Bitcoin with a short position of Bitfinex Bitcoin. See also your portfolio center. Please also check ongoing floating volatility patterns of HitBTC Bitcoin and Bitfinex Bitcoin.
Assuming 30 trading days horizon, HitBTC Bitcoin USD is expected to under-perform the Bitfinex Bitcoin. But the crypto apears to be less risky and, when comparing its historical volatility, HitBTC Bitcoin USD is 1.0 times less risky than Bitfinex Bitcoin. The crypto trades about -0.27 of its potential returns per unit of risk. The Bitfinex Bitcoin USD is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest 946,240 in Bitfinex Bitcoin USD on April 23, 2018 and sell it today you would lose (174,410) from holding Bitfinex Bitcoin USD or give up 18.43% of portfolio value over 30 days.
Pair Corralation between HitBTC Bitcoin and Bitfinex Bitcoin
Overlapping area represents the amount of risk that can be diversified away by holding HitBTC Bitcoin USD and Bitfinex Bitcoin USD in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Bitfinex Bitcoin USD and HitBTC 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 HitBTC Bitcoin USD are associated (or correlated) with Bitfinex Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitfinex Bitcoin USD has no effect on the direction of HitBTC Bitcoin i.e. HitBTC Bitcoin and Bitfinex Bitcoin go up and down completely randomly.
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