This module allows you to analyze existing cross correlation between Bitstamp Bitcoin USD and Coinbase Bitcoin USD. You can compare the effects of market volatilities on Bitstamp Bitcoin and Coinbase 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 Bitstamp Bitcoin with a short position of Coinbase Bitcoin. See also your portfolio center. Please also check ongoing floating volatility patterns of Bitstamp Bitcoin and Coinbase Bitcoin.
Assuming 30 trading days horizon, Bitstamp Bitcoin is expected to generate 1.1 times less return on investment than Coinbase Bitcoin. But when comparing it to its historical volatility, Bitstamp Bitcoin USD is 1.12 times less risky than Coinbase Bitcoin. It trades about 0.07 of its potential returns per unit of risk. Coinbase Bitcoin USD is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 625,101 in Coinbase Bitcoin USD on September 15, 2018 and sell it today you would earn a total of 18,908 from holding Coinbase Bitcoin USD or generate 3.02% return on investment over 30 days.
Pair Corralation between Bitstamp Bitcoin and Coinbase Bitcoin
Overlapping area represents the amount of risk that can be diversified away by holding Bitstamp Bitcoin USD and Coinbase Bitcoin USD in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Coinbase Bitcoin USD and Bitstamp 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 Bitstamp Bitcoin USD are associated (or correlated) with Coinbase Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coinbase Bitcoin USD has no effect on the direction of Bitstamp Bitcoin i.e. Bitstamp Bitcoin and Coinbase Bitcoin go up and down completely randomly.
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