This module allows you to analyze existing cross correlation between itBit Bitcoin USD and Gemini Bitcoin USD. You can compare the effects of market volatilities on itBit Bitcoin and Gemini 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 itBit Bitcoin with a short position of Gemini Bitcoin. See also your portfolio center. Please also check ongoing floating volatility patterns of itBit Bitcoin and Gemini Bitcoin.
Assuming 30 trading days horizon, itBit Bitcoin USD is expected to under-perform the Gemini Bitcoin. In addition to that, itBit Bitcoin is 1.15 times more volatile than Gemini Bitcoin USD. It trades about -0.26 of its total potential returns per unit of risk. Gemini Bitcoin USD is currently generating about -0.3 per unit of volatility. If you would invest 934,383 in Gemini Bitcoin USD on April 27, 2018 and sell it today you would lose (200,133) from holding Gemini Bitcoin USD or give up 21.42% of portfolio value over 30 days.
Pair Corralation between itBit Bitcoin and Gemini Bitcoin
Overlapping area represents the amount of risk that can be diversified away by holding itBit Bitcoin USD and Gemini Bitcoin USD in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Gemini Bitcoin USD and itBit 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 itBit Bitcoin USD are associated (or correlated) with Gemini Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemini Bitcoin USD has no effect on the direction of itBit Bitcoin i.e. itBit Bitcoin and Gemini Bitcoin go up and down completely randomly.
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