This module allows you to analyze existing cross correlation between BitBay Bitcoin USD and Poloniex Bitcoin USD. You can compare the effects of market volatilities on BitBay Bitcoin and Poloniex 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 BitBay Bitcoin with a short position of Poloniex Bitcoin. See also your portfolio center. Please also check ongoing floating volatility patterns of BitBay Bitcoin and Poloniex Bitcoin.
Assuming 30 trading days horizon, BitBay Bitcoin is expected to generate 1.15 times less return on investment than Poloniex Bitcoin. But when comparing it to its historical volatility, BitBay Bitcoin USD is 1.28 times less risky than Poloniex Bitcoin. It trades about 0.25 of its potential returns per unit of risk. Poloniex Bitcoin USD is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 613,957 in Poloniex Bitcoin USD on June 22, 2018 and sell it today you would earn a total of 131,323 from holding Poloniex Bitcoin USD or generate 21.39% return on investment over 30 days.
Pair Corralation between BitBay Bitcoin and Poloniex Bitcoin
Overlapping area represents the amount of risk that can be diversified away by holding BitBay Bitcoin USD and Poloniex Bitcoin USD in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Poloniex Bitcoin USD and BitBay 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 BitBay Bitcoin USD are associated (or correlated) with Poloniex Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poloniex Bitcoin USD has no effect on the direction of BitBay Bitcoin i.e. BitBay Bitcoin and Poloniex Bitcoin go up and down completely randomly.
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