Correlation Between Bitcoin Cash and Power Ledger
Can any of the company-specific risk be diversified away by investing in both Bitcoin Cash and Power Ledger 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 Power Ledger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Cash and Power Ledger, you can compare the effects of market volatilities on Bitcoin Cash and Power Ledger 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 Power Ledger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Cash and Power Ledger.
Diversification Opportunities for Bitcoin Cash and Power Ledger
0.6 | Correlation Coefficient |
Poor diversification
The 24 months correlation between Bitcoin and Power is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Cash and Power Ledger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Ledger 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 Power Ledger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Ledger has no effect on the direction of Bitcoin Cash i.e., Bitcoin Cash and Power Ledger go up and down completely randomly.
Pair Corralation between Bitcoin Cash and Power Ledger
Assuming the 90 days trading horizon Bitcoin Cash is expected to generate 1.09 times more return on investment than Power Ledger. However, Bitcoin Cash is 1.09 times more volatile than Power Ledger. It trades about 0.08 of its potential returns per unit of risk. Power Ledger is currently generating about -0.21 per unit of risk. If you would invest 47,908 in Bitcoin Cash on January 24, 2024 and sell it today you would earn a total of 3,193 from holding Bitcoin Cash or generate 6.66% return on investment over 90 days.
| Time Period | 24 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin Cash vs. Power Ledger
Performance |
| Timeline |
| Bitcoin Cash |
| Power Ledger |
Bitcoin Cash and Power Ledger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Cash and Power Ledger
The main advantage of trading using opposite Bitcoin Cash and Power Ledger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Cash position performs unexpectedly, Power Ledger 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 Power Ledger will offset losses from the drop in Power Ledger's long position.| Bitcoin Cash vs. Bitcoin | Bitcoin Cash vs. Dogecoin | Bitcoin Cash vs. Litecoin | Bitcoin Cash vs. Ethereum Classic |
| Power Ledger vs. Solana | Power Ledger vs. XRP | Power Ledger vs. The Open Network | Power Ledger vs. Staked Ether |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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