This module allows you to analyze existing cross correlation between LocalBitcoins Bitcoin USD and Gemini Bitcoin USD. You can compare the effects of market volatilities on LocalBitcoins 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 LocalBitcoins Bitcoin with a short position of Gemini Bitcoin. See also your portfolio center. Please also check ongoing floating volatility patterns of LocalBitcoins Bitcoin and Gemini Bitcoin.
Assuming 30 trading days horizon, LocalBitcoins Bitcoin is expected to generate 4.07 times less return on investment than Gemini Bitcoin. But when comparing it to its historical volatility, LocalBitcoins Bitcoin USD is 4.01 times less risky than Gemini Bitcoin. It trades about 0.13 of its potential returns per unit of risk. Gemini Bitcoin USD is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 642,275 in Gemini Bitcoin USD on November 12, 2018 and sell it today you would lose (307,471) from holding Gemini Bitcoin USD or give up 47.87% of portfolio value over 30 days.
Pair Corralation between LocalBitcoins Bitcoin and Gemini Bitcoin
Overlapping area represents the amount of risk that can be diversified away by holding LocalBitcoins 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 LocalBitcoins 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 LocalBitcoins 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 LocalBitcoins Bitcoin i.e. LocalBitcoins Bitcoin and Gemini Bitcoin go up and down completely randomly.
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