This module allows you to analyze existing cross correlation between Bitfinex Bitcoin USD and Gemini Bitcoin USD. You can compare the effects of market volatilities on Bitfinex 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 Bitfinex Bitcoin with a short position of Gemini Bitcoin. See also your portfolio center. Please also check ongoing floating volatility patterns of Bitfinex Bitcoin and Gemini Bitcoin.
Assuming 30 trading days horizon, Bitfinex Bitcoin USD is expected to generate 1.05 times more return on investment than Gemini Bitcoin. However, Bitfinex Bitcoin is 1.05 times more volatile than Gemini Bitcoin USD. It trades about -0.01 of its potential returns per unit of risk. Gemini Bitcoin USD is currently generating about -0.02 per unit of risk. If you would invest 652,590 in Bitfinex Bitcoin USD on June 15, 2018 and sell it today you would lose (14,700) from holding Bitfinex Bitcoin USD or give up 2.25% of portfolio value over 30 days.
Pair Corralation between Bitfinex Bitcoin and Gemini Bitcoin
Overlapping area represents the amount of risk that can be diversified away by holding Bitfinex 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 Bitfinex 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 Bitfinex 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 Bitfinex Bitcoin i.e. Bitfinex Bitcoin and Gemini Bitcoin go up and down completely randomly.
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