Correlation Between Bitcoin Cash and Maker
Can any of the company-specific risk be diversified away by investing in both Bitcoin Cash and Maker at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bitcoin Cash and Maker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Cash and Maker, you can compare the effects of market volatilities on Bitcoin Cash and Maker 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 Bitcoin Cash with a short position of Maker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Cash and Maker.
Diversification Opportunities for Bitcoin Cash and Maker
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bitcoin and Maker is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Cash and Maker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maker and Bitcoin Cash 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 Bitcoin Cash are associated (or correlated) with Maker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maker has no effect on the direction of Bitcoin Cash i.e., Bitcoin Cash and Maker go up and down completely randomly.
Pair Corralation between Bitcoin Cash and Maker
Assuming the 90 days trading horizon Bitcoin Cash is expected to generate 1.07 times more return on investment than Maker. However, Bitcoin Cash is 1.07 times more volatile than Maker. It trades about 0.13 of its potential returns per unit of risk. Maker is currently generating about -0.06 per unit of risk. If you would invest 41,441 in Bitcoin Cash on January 20, 2024 and sell it today you would earn a total of 7,101 from holding Bitcoin Cash or generate 17.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bitcoin Cash vs. Maker
Performance |
| Timeline |
| Bitcoin Cash |
| Maker |
Bitcoin Cash and Maker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Cash and Maker
The main advantage of trading using opposite Bitcoin Cash and Maker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Cash position performs unexpectedly, Maker can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Maker will offset losses from the drop in Maker's long position.| Bitcoin Cash vs. Bitcoin | Bitcoin Cash vs. Dogecoin | Bitcoin Cash vs. Litecoin | Bitcoin Cash vs. Ethereum Classic |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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